Nikkei edges down, investors hesitant before BOJ meeting


* Market lacks direction ahead of BOJ easing decision

* Softbank supports with gains after huge dividend hike

* Nintendo loses 6 pct after first operating loss

By Sophie Knight

TOKYO, April 27 (Reuters) - Japan's Nikkei inched down on Friday after Spain suffered with a two-notch credit rating cut, but investor attention was fixed firmly on the Bank of Japan to see if it announces fresh easing measures later in line with market forecasts.

The Nikkei share average dipped to 9,551.12, just above its 13-week moving average of 9,542.93, while the broader Topix fell 0.2 percent to 808.13.

"Where the market ends up today depends on the content of the BOJ package rather than whether there will be one of not," said Masayuki Otani, chief market analyst at Securities Japan. "But at long as it roughly meets market expectations, the impact on trading will be limited."

The market has already priced in an expectation that the BOJ will expand its asset-purchasing scheme by 5 to 10 trillion yen, according to strategists, while some say the bank may also begin buying longer-dated Japanese government bonds.

"The BOJ decision to ease in February was a surprise, but this time it's expected, so unless they really dazzle today, the Nikkei won't go up. In fact it's far more likely to go down if they don't meet expectations," said Masayuki Doshida, senior market analyst at Rakuten Securities.

Concerns that Spain's credit rating downgrade by S&P could worsen the euro zone debt crisis offset upbeat U.S. housing data and stronger-than-expected corporate earnings that drove U.S. stocks to a third consecutive day of gains.

Some stocks pierced the hesitant mood, with Advantest Corp jumping 5.5 percent after beating market expectations with its operating profit forecast of 12 to 20 billion yen for the year ending March 2012.

Softbank Corp gained 3.2 percent, propping up the main board as the heaviest traded stock by turnover, after hiking its dividend to 40 yen from 5 yen after posting an operating profit of 675.3 billion yen ($8.4 billion) for the year to March.

Market players are confident that Japan's earning season can catapult the Nikkei average back above 10,000 by June, but the prospect of three Japanese national holidays next week weakened bullish sentiment and few investors look ready yet to move from their long-term positions.

The strengthening yen, with the dollar dipping below 81 yen at the end of the morning session, also discouraged investors.

"We might see a flurry of activity on the first day after the string of national holidays (April 7), depending on what happens in the exchange market," said Securities Japan's Otani.

"A strengthening yen today would certainly be bad news for the Nikkei," he added.

Nintendo skidded 6.4 percent after it posted its first annual operating loss of 37.3 billion yen ($461.69 million) after the close on Thursday, citing shrinking sales of its ageing Wii gaming console and weak demand for its new 3DS handheld device.

The biggest loser on the main board was Ulvac Inc, which sank 18.9 percent after the electrical machinery maker widened its net loss forecast to 51.6 billion yen from 1.8 billion yen for the year ending June 2012, citing declining orders for flat-panel display and photovoltaic (PV) equipment. (Editing by Richard Pullin)



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