TOKYO, Dec 11 (Reuters) - Japan's Nikkei share average

fell on Wednesday, as investors awaited a key inflation report

from the United States that is likely to influence the Federal

Reserve's rate path, with chip-related stocks leading the

declines.

The Nikkei fell 0.65% to 39,112.8 by the midday

break, while the broader Topix slipped 0.24% to

2,734.84.

"The market was cautious ahead of the U.S. Consumer Price

Index which will gauge the Fed's policy for the next year," said

Seiichi Suzuki, chief equity market analyst at Tokai Tokyo

Intelligence Laboratory.

Japanese equities tracked declines in Wall Street's main

indexes on Tuesday before the November reading of the CPI, due

on Wednesday - one of the last major reports ahead of the Fed's

Dec. 17-18 meeting.

Investors also awaited the Bank of Japan's (BOJ) policy

decision due on Dec. 19.

BOJ Governor Kazuo Ueda has signalled readiness to hike

rates again in the near term if the bank becomes more convinced

that inflation will stay around 2%, backed by solid consumption

and wage growth.

Among chip-testing equipment makers Advantest ( ADTTF ) fell

2.63% and Tokyo Electron ( TOELF ) lost 0.69%.

Chip-making device supplier Disco fell 2.84% to

become the biggest percentage loser on the Nikkei.

Kawasaki Heavy Industries ( KWHIF ) jumped 7.97% to become

the top percentage gainer on the Nikkei. Peer IHI rose

4.98%.

TopCon ( TOPCF ) surged 23% to a daily limit as the eyecare

products maker said it is exploring going private among other

measures to raise corporate value, following reports that

private equity firms were placing bids to take the firm private.

Of more than 1,600 stocks trading on the Tokyo Stock

Exchange's prime market, 36% rose and 58% fell, with 4% trading

flat.