* Some commodities shares dip on China tightening worry
* Profit-taking in recent gainers tempers rise
* Toyota up; finds no evidence over 'runaway' Prius claim
* Firm Asian shares lend support to Nikkei
* Some talk of overseas investor buying
By Masayuki Kitano
TOKYO, March 16 (Reuters) - Japan's Nikkei average rose 0.2
percent on Tuesday but rises were limited by profit-taking in
recent gainers such as Honda Motor <7267.T> and ahead of a policy
decision by the Bank of Japan.
Some commodities-linked shares retreated after oil and metals
prices fell almost 2 percent on Monday, hurt in part by fears
that China may step up monetary tightening measures.
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The Nikkei initially dipped on the falls in
commodities-related shares and the yen's rise against the euro,
but buying by overseas investors and firmness in other Asian
equities <.MIAPJ0000PUS> lent the market support, players said.
Gains were limited, however, especially with investors
reluctant to aggressively take positions ahead of monetary policy
decisions by the Federal Reserve and the Bank of Japan.
Sources familiar with the thinking of Japan's central bank
have told Reuters it is leaning towards easing monetary policy at
its two-day policy review that ends on Wednesday, under pressure
from a government calling for action to beat deflation.
[]
A focal point is whether the BOJ will decide to expand its
three-month fixed-rate fund supply operation, either by
increasing the amount from the current 10 trillion yen ($110.5
billion) or by extending the length of the operation to six
months or longer.
Tokyo shares have already risen and the yen has weakened
following various media reports saying the BOJ may adopt such
tweaks to the fixed-rate fund supply scheme, said Hiroaki
Osakabe, a fund manager at Chibagin Asset Management.
"Unless easing steps stronger than the market is expecting
are taken it is hard to expect the market to rally strongly,"
Osakabe said, referring to Tokyo shares.
The benchmark Nikkei index rose 24.54 points to 10,776.52
<>, inching back toward Monday's seven-week intraday high of
10,808.84.
The broader Topix index rose 0.4 percent to 942.33 <>.
Later on Tuesday the interest rate setting committee of the
Federal Reserve holds a one-day meeting in which the U.S. central
bank is widely expected to repeat its promise to keep borrowing
costs exceptionally low for "an extended period". []
Shares of Toyota Motor Corp <7203.T> rose 2.1 percent to
3,580 yen. The automaker said it had found no evidence to support
the driver's version of a widely publicised "runaway" Prius
episode on a California freeway a week ago, suggesting
authorities examine if the incident happened as reported to
police. []
Some exporters slipped as the yen rose against the euro and
pulled away from a one-month low of 125.36 yen <EURJPY=R> to the
euro struck on trading platform EBS on Monday.
Honda Motor <7267.T> dipped 0.8 percent to 3,270 yen and
Tokyo Electron <8035.T> shed 0.2 percent to 5,870 yen.
Among commodities-linked shares, Mitsui Co Ltd <8031.T> fell
0.7 percent to 1,528 yen and oil developer Inpex Corp <1605.T>
fell 0.8 percent to 645,000 yen.
Shipping firm Nippon Yusen <9101.T> pared some of the
previous day's gains made on a key shipping index's rise to a
two-month high, falling 0.6 percent to 352 yen.
(Editing by Michael Watson)
