(Updates at 0441 GMT)

TOKYO, Oct 31 (Reuters) - Japan's Nikkei share average

index slipped on Thursday, as investors locked in their profits

after the Bank of Japan kept key rates unchanged.

The Nikkei fell 1% at 38,875.78 as of 0441 GMT,

after tracking the overnight declines in U.S. equities to open

0.25% lower.

The broader Topix slipped 0.84% to 2,681.05.

The BOJ maintained ultra-low interest rates on Thursday and

signalled the need to scrutinise global economic developments.

"Investors sold stocks to book profits after the big event

was over," said Takamasa Ikeda, senior portfolio manager at GCI

Asset Management.

"The Nikkei was a little bit overheated after a recent

rally. The BOJ's decision was in line with expectations but it

became a trigger for the sell-off."

The Nikkei rose to a two-week closing high on Wednesday.

Since peaking in July, it has been held hostage by a

volatile yen, driven by expectations of a U.S. rate cut

and the dollar. Still, the index has risen more than 17% this

year.

Japan's markets have been hamstrung this week by political

uncertainty after the ruling Liberal Democratic Party-led

coalition lost its parliamentary majority in the weekend

election.

The make-up of the future government is in flux and Prime

Minister Shigeru Ishiba and the LDP may court smaller opposition

parties that favour maintaining ultra-loose monetary policy and

oppose plans to raise taxes.

Among stocks, Uniqlo-owner Fast Retailing ( FRCOF ) fell 1.5%

and was the biggest drag on the Nikkei.

Kyocera ( KYOCF ) tanked 11.8% after the smartphone maker cut

its full-year operating profit forecast for fiscal year 2025.

Chip-testing equipment maker Advantest ( ADTTF ) jumped 6.7%.