* Nikkei dips 0.1 pct, Topix flat
* Seibu Holdings up after Cerberus sells remaining stake in firm
* Rise in industrial metal prices lifts smelters
TOKYO, Aug 17 (Reuters) - Japan's Nikkei share average felt the weight of a rebounding yen and edged down on Thursday, while conglomerate Seibu Holdings advanced after an equity fund sold its remaining stake in the company to end a decade-old capital tie-up.
The Nikkei ended the morning session down 0.1 percent at 19,713.62.
Investor sentiment cooled as the yen gained against the dollar after minutes of the Federal Reserve's meeting showed policymakers were worried about weak U.S. inflation and President Donald Trump's decision to dismantle two key business advisory councils.
"The dollar going below 110 yen on what was perceived as dovish Fed minutes is acting as a drag for the Nikkei. Dollar/yen is the main driver for a market that is range bound and short of other incentives," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
"As for Trump's latest decisions, they might not have an immediate impact on the Japanese market. But their effects could be unavoidable in the longer term, as they could negatively impact expectations towards the U.S. economy."
Wall Street shares ended off the day's highs on Wednesday, as Trump's move added further doubt on the president's ability to push through with tax reforms and fiscal stimulus policies.
Railway and hotel conglomerate Seibu Holdings Inc rose 5.3 percent after it said U.S. private equity firm Cerberus Group disposed all of its remaining 2.35 percent stake in the company.
Cerberus took a stake in Seibu Holdings in 2006 to provide the then struggling conglomerate with much-needed assistance, although the relationship between the two appeared fraught at times.
Kakaku.com Inc climbed 3 percent after the electronic commerce operator said it would pay a dividend of 32 yen per share for the year through March 2018, compared with the previous dividend plan of 28 yen per share.
JAC Recruitment dropped 6.3 percent after the recruitment agency said its July consolidated sales fell 0.2 percent year-on-year following a surge of 27.6 percent in June.
Industrial metal refiner and manufacturer Toho Zinc Co rallied 10.4 percent, boosted after the price of zinc surged to the highest in almost a decade.
With other industrial metals also buoyant on expectations of strong global demand - aluminum and copper hit their highest since 2014 - Tokyo's non-ferrous metals subindex rose 0.55 percent.
Smelters Dowa Holdings and Sumitomo Metal Mining Co gained 4 percent and 2 percent, respectively.
The broader Topix was flat at 1,615.91. (Editing by Jacqueline Wong)