Nikkei dips 0.3 pct in see-saw trade before Fed

By Aiko Hayashi

TOKYO (Reuters) - Japan's Nikkei stock average shed 0.3 percent in see-saw trade on Wednesday before a U.S. interest rate decision, with investors selling off shares with disappointing earning outlooks such as Fujifilm Holdings Corp (4901.T).

Trading houses such as Mitsubishi Corp (8058.T) also dragged on the market after a fall in commodity prices, while property issues declined after a brokerage downgrade on Japan's top two property firms, Mitsui Fudosan Co (8801.T) and Mitsubishi Estate Co (8802.T).

But financial shares such as Nomura Holdings (8604.T), Japan's biggest brokerage, gained on views the worst of the subprime problems is over and the U.S. central bank may pause its aggressive run of rate cuts.

"Investors don't have factors for trade before seeing the U.S. market reaction to the Fed decision," said Yutaka Miura, deputy manager of the equity information department at Shinko Securities.

"Earnings provide some trading news in individual stocks, but they are not good enough to bring up the whole market."

The Fed is expected to trim rates by a quarter percentage point to 2 percent on Wednesday, which would take its rate cuts over the past seven months to 3.25 percentage points. Investors also expect a tweaked policy statement indicating the central bank may pause its aggressive run of rate cuts.

The Nikkei average .N225 fell 44.38 points to end at 13,849.99.

On Monday, the benchmark broke above 14,000 for the first time since February 27. Japanese markets were closed on Tuesday for a national holiday.