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Nikkei dips as investors await Fed meeting

Ayai Tomisawa

* Insurers underperform on expectations for lower rates

* Investors unlikely take positions ahead of Fed

TOKYO, June 18 (Reuters) - Japan's Nikkei edged lower in choppy trade on Tuesday but most investors stayed on the sidelines ahead of a U.S. central bank policy decision later in the week.

The Nikkei share average fell 0.3% to 21,067.95 points by the midday break.

Expectations that the Federal Reserve will start cutting interest rates has helped global markets recover from heavy selling sparked by intensifying global trade disputes.

While the Fed Reserve is unlikely to cut rates at its meeting on Wednesday, its statement will be analyzed for clues on possible near-term easing moves, analysts said.

"The market has nearly priced in hopes for a U.S. rate cut eventually since the Fed chairman made remarks on June 4 suggesting a lower rate," said Takuya Takahashi, a strategist at Daiwa Securities, adding that the Nikkei will likely trade around 21,500 in relief if the decision is in line with market hopes.

Insurers underperformed on expectations for lower rates. Japan Post Insurance declined 0.8% and T&D Holdings skidded 1%.

Tsuruha Holdings, a drugstore operator, bucked the weakness and jumped 5.4% after it said it expects its net profit to grow 5.1% to 26.1 billion yen for the year ending May 2020.

Exporters were mixed, with Toyota Motor Corp rising 0.6%, Sony Corp shedding 0.7% and Tokyo Electron dropping 1.2%

Tateru Inc, whose employees were involved in hundreds of cases of tampering with customer loan documents last year, tumbled 16.5% after the Nikkei business daily reported that the land ministry decided to suspend operations.

The broader Topix dropped 0.1% to 1,538.22. (Editing by Kim Coghill)