Nikkei eases as post-BOJ gains prove short-lived

* Investors quick to take profits on gains after BOJ action

* BOJ outcome generally welcome - analyst

* Investor attention will shift to Oct-Dec earnings -trader

TOKYO, Jan 22 (Reuters) - The Nikkei share average ended lower on Tuesday in volatile trade, erasing gains scored immediately after the Bank of Japan set a 2 percent inflation target and made an open-ended commitment to buy assets but delayed action on that pledge until next year. The Nikkei shed 0.4 percent to end at 10,709.93 after rising as much as 1 percent following the BOJ announcement. It retreated for a second day in a row from Friday's nearly three-year closing high of 10,913.30. The central bank has been under relentless pressure from new Prime Minister Shinzo Abe for aggressive action to overcome deflation and had been widely expected to double its inflation target to 2 percent, although the open-ended asset buying pledge took some market players by surprise. Abe's calls for bold BOJ easing, dating back to mid-November when he was the leading candidate to win a general election, have helped to weaken the yen, in turn boosting exporters and sparking a 26 percent rally in the Nikkei. Analysts said that a correction has kicked in and may continue for the time being with the BOJ's policy announcement out of the way. "The BOJ's decisions were generally welcomed by the market. It's a big step toward," said Yoshito Sakakibara, vice president of investment research at JPMorgan Asset Management. "But for today, some investors focused on the timing of open-ended asset buying, which won't start until 2014."

FOCUS ON FUNDAMENTALS Right after the BOJ's decision, the dollar rose as high as 90.18 yen, nearing a 2-1/2 year high of 90.25 yen that was set on Monday. But the dollar later sagged back and was last fetching 89.28 yen. Exporters succumbed to profit-taking, with Toyota Motor Corp falling 0.9 percent, Honda Motor Co dropping 2.3 percent and Canon Inc sliding 1.7 percent. Gainers included Olympus Corp, up 6.6 percent after it submitted to the Tokyo Stock Exchange a written affirmation on its internal control systems which, if approved, will see the camera maker's "securities on alert" status lifted. It was placed on that status following an accounting scandal that broke in late 2011. UBS Securities started coverage of Olympus with a "buy" rating and a target price of 3,000 yen. Toshiba Corp rose 0.8 percent after J.P. Morgan raised its rating to "overweight" from "underweight", citing expectations of strong earnings on a softer yen. The market will be scrutinising quarterly earnings announcements over the next few weeks, with recent gains in bellwether stocks such as autos and technology not yet backed up sufficiently by improvements in fundamentals, traders said. "Now that the major event is over, investors' attention will shift to earnings announcements for the third quarter, and the consensus is that most companies will report poor results," said Makoto Kikuchi, chief executive of Myojo Asset Management. The transport equipment sector has risen 37 percent since mid-November and the electronics machinery sector has gained 29 percent. "I expect to see some corrections especially in tech shares ... The earnings will be a wake up call to remind investors that the valuations after these rises are not justified," Kikuchi said. On Tuesday, The broader Topix slipped 0.4 percent to 901.15 in active trade, with 3.92 billion shares changing hands, up from last week's average daily volume of 3.73 billion shares.