* Inbound-tourism stocks drop on weak July arrivals
* Futures buying helps Nikkei, but Topix down
By Ayai Tomisawa
TOKYO, Aug 16 (Reuters) - Japan’s Nikkei erased losses on Thursday morning following news of coming talks between China and the United States, which raised hopes of an easing of their trade war and made the yen weaken.
The Nikkei share average was up 0.1 percent to 22,234.19 at the midday break. It had been in negative territory before China’s commerce ministry said Vice Minister Wang Shouwen will hold talks in Washington in late August.
At the break, the broader Topix slumped 0.4 percent to 1,690.91, after touching its lowest level since late March.
The dollar was slightly up against the yen at 110.82, compared to 110.47 in early Asian trade, after China’s announcement.
“The news lifted investors’ risk stance,” said Chihiro Ohta, general manager at SMBC Nikko Securities, adding that the market’s recovery mainly stemmed from futures’.
But declining issues outnumbered advancing ones 1,612 to 424 on the main board.
“The Topix indicates the actual state of the Japanese market as the Nikkei is somewhat supported by buying in large-cap stocks which are heavyweight,” said Yutaka Miura, a senior technical analyst at Mizuho Securities.
“Since the Topix is weak, we need to stay cautious against a possible slide in the market in the coming days.”
Weakness in emerging market currencies remains a concern as this could trigger buying of safe haven currencies, strengthening the yen, Miura added.
Shares of Japanese department stores, cosmetics makers and drugstores, which benefit from inbound tourism, fell sharply on news of slowed visitor arrivals in July.
The Japan National Tourism Organization said arrivals rose 5.6 percent from a year earlier to 2.832 million. The growth rate slowed from double-digits, due to natural disasters this summer and heavy rain in western Japan.
Isetan Mitsukoshi dropped 1.7 percent, Takashimaya by 2.1 percent and Shiseido Co by 3.4 percent. Kose Corp dived 6.9 percent and Matsumotokiyoshi declined 2.6 percent.
Large cap, index-heavy Fast Retailing rose 2.2 percent, while Fanuc Corp surged 1.9 percent, helping the Nikkei outperform the Topix by adding 54 positive points to the Nikkei benchmark index. (Editing by Richard Borsuk)