* Nikkei rises 0.4 pct, Topix flat
* Oil shares hit one-month highs on rising futures
* Main investors remain sidelined before key events - trader
By Tomo Uetake
TOKYO, Aug 29 (Reuters) - Japan’s Nikkei share average bounced back on Thursday, on track to end a three-day losing run, as the yen comes off a two-week high against the dollar hit the previous day, with investors looking for leads from other Asian markets.
The benchmark Nikkei advanced 0.4 percent to 13,390.14 in midmorning trade, after shedding 1.5 percent to a two-month low of 13,338.46 on Wednesday. The broader Topix was little changed at 1,113.55.
“Short-term traders are reacting to short-term news flow, while the main investors are sitting on the sidelines, waiting for a number of market-moving factors to become clear,” said Stefan Worrall, director of equity cash sales at Credit Suisse in Tokyo.
With so many potentially market-moving events lined up in coming weeks, it is only reasonable for long-term investors to want to wait for a clearer direction, Worrall added, referring to U.S. Federal Reserve’s next monetary policy meeting, decisions on implementation of Japan’s sales tax, and selection of host city for the 2020 Summer Olympics.
Prime Minister Shinzo Abe is expected to present a fiscal plan to his counterparts from the Group of 20 countries at the September 5-6 summit in Russia.
Tokyo is vying with Madrid and Istanbul for the 2020 Summer Games, and the International Olympic Committee will deliver its decision on September 7.
Analysts say Tokyo’s gains will be limited by tensions in the Middle East, where the United States is preparing to lead a Western military strike against Syria, while investors are also wary of persistent selloffs in emerging markets.
Oil shares soared to one-month highs on Thursday on the back of rising oil futures as the threat of Western involvement in the Syrian conflict deepened concerns over Middle East oil supply continuity.
Inpex Corp and Japan Petroleum Exploration Co jumped 5.4 percent and 4.8 percent, respectively.
Brent crude rose on Wednesday to hit a six-month high in the biggest two-day rally since November.
“I think the Nikkei’s upside is quite limited for the moment. Investors will be hesitant to take large positions until external uncertainties abate,” said Shun Maruyama, chief Japan equity strategist at BNP Paribas.
The Japanese currency was last traded at 97.65 yen against the dollar, moving away from 96.81 yen touched on Wednesday, a level last visited two weeks ago.
A weaker yen makes export-reliant Japan’s products more competitive in the global market.
The yen is down 13 percent versus the dollar for the year and the benchmark Nikkei is up 29 percent this year, spurred by the government’s expansionary fiscal policy and the Bank of Japan’s aggressive monetary stimulus.