By Dominic Lau TOKYO, Jan 9 (Reuters) - Japan's Nikkei average slipped on Wednesday, heading for a third straight session of losses, as a rebounding yen prompted investors to take profits on exporters after their recent stellar performance. The Nikkei has rallied more than 20 percent over the past two months, led by exporters as the yen weakened after new Prime Minister Shinzo Abe called on the central bank to adopt aggressive policy to energise the ailing economy, including setting an inflation target of 2 percent. The Bank of Japan will consider easing monetary policy again this month as it eyes doubling its inflation target, sources told Reuters, as weakness in the economy threatens to delay the country in getting out of deflation. Any easing will likely take the form of another increase in the BOJ's 101 trillion yen ($1.2 trillion) asset buying and lending programme, mostly for purchases of government bonds and treasury discount bills, sources familiar with its thinking say. Profit-taking in the dollar and the euro strengthened the Japanese currency, which was quoted at 87.19 on Wednesday after rising 0.9 percent in the previous session, its second straight day of gains. The Nikkei eased 0.5 percent to 10,458.78, breaking below its five-day moving average at 10,529.88 and taking its 14-day relative strength index to 70.4, just above the 70-mark which is considered overbought and often signals a near-term pull back. "People are selling some of the high-beta names that they have made some money in, and are moving into some of the defensives," a senior dealer at a foreign brokerage in Tokyo said. "There is some concerns that the yen could strengthen ... probably people are banking on the European Central Bank meeting resulting in some sort of bad news for the euro." The ECB is expected to hold off on cutting interest rates at its regular policy meeting on Thursday. Major exporters succumbing profit-taking included Toyota Motor Corp, Honda Motor Co, Canon Inc and Daikin Industries, down between 0.7 and 2.1 percent. However, Takashi Hiroki, chief strategist at Monex Inc, said the sell-off was likely to be limited as investors may bet on a stronger Wall Street performance on Wednesday after Alcoa Inc , the largest aluminium producer in the United States, reported an in-line fourth quarter profit after the market close. Alcoa shares rose in after-hours trading. The recent rally has also pushed up valuations of Japanese equities, which carry a 12-month forward price-to-earnings ratio of 13 versus 12.7 for the U.S. S&P 500 and 11.5 for the pan-European STOXX Europe 600, according to Thomson Reuters Datastream. Japan's broader Topix dropped 0.6 percent to 866.78 in midmorning trade on Wednesday. Financials also came under pressure after recent gains, with Mitsubishi UFJ Financial Group off 2 percent and Mizubho Financial Group down 1.2 percent. But Seven & I Holdings Co advanced 1.4 percent after its quarterly operating profit rose 4.8 percent as higher profits from its core 7-Eleven stores were supported by stronger income figures at other retail formats.