* Nikkei down 0.15 pct, Topix down 0.1 pct
* Nikkei's losses limited but market wary of US political risks
* Toyota to reportedly cut price of steel supplied to parts makers
* Steel makers slip broadly
TOKYO, Aug 24 (Reuters) - Japan's Nikkei share average slipped towards a 3-1/2-month low on Thursday, dragged down by Wall Street losses, while steel makers fell after reports that Toyota Motor Corp was looking to cut the price of steel supplied to component makers.
Bucking gains elsewhere in Asia, the Nikkei was down 0.2 percent at 19,407.30 points by late morning. A fall below 19,361.95 plumbed on Tuesday would take the index to its lowest since May 2.
The broader Topix was down 0.1 percent at 1,598.76.
Japanese shares took their cues from Wall Street, which fell overnight as a threat from U.S. President Donald Trump to shut down the government if Congress fails to fund a Mexico border wall curbed investor risk appetite.
Yen gains overnight amid a weaker dollar also soured the mood.
"The Nikkei has managed to limit its losses as dollar/yen has clawed back above the 109 yen threshold. But 'risk off' lingers in the broader markets, and bids into Japanese shares have been limited as well," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
Political uncertainty stemming from the United States was also seen keeping the Nikkei in proximity of the 3-1/2-month low.
"The market is sensitive to Trump's day-to-day comments," said Yoshihiro Okumura, general manager at Chibagin Asset Management.
"Uncertainty over U.S. political risks is market's major concern now."
Steel makers fell after the Nikkei business daily reported that Toyota expects to lower the price of wholesale steel supplied to component makers in the October-March period due to declining costs of steel making materials like coal. It would be Toyota's first price cut in a year and a half.
Nippon Steel and Sumitomo Metal dropped 2.3 percent, Kobe Steel lost 5.8 percent and JFE Holdings fell 4.4 percent.
Tokyo's iron and steel subsector was down 2.7 percent.
Toyota fell 0.4 percent, but Toyota-affiliated parts makers edged up amid the prospect of lower input costs, with Denso adding 0.2 percent and Toyota Industries Corp rising 0.5 percent.
Mitsubishi Heavy Industries dropped as much as 1 percent to 414.3 yen, the lowest since November 2016, following a report that the MRJ commercial jet the company is developing had engine trouble during a test flight.
Development costs for the MRJ jet has been mounting as the aircraft's launch has already been delayed five times.
Shizuoka Bank rose as much as 3.1 percent after announcing that it would buy back up to 10 million of its own shares, or 1.65 percent of its shares outstanding.
Grilled meat restaurant chain operator Anrakutei Co was down 0.8 percent after reports that some customers were hospitalised and found to have been infected with the O-157 strain of the E.coli bacteria. (Editing by Kim Coghill)