(Updates with closing levels)

By Brigid Riley

TOKYO, May 2 (Reuters) - Japan's Nikkei share average

finished lower for a second consecutive day on Thursday, with

the yen's sudden appreciation and a mixed performance on Wall

Street dragging on sentiment.

The Nikkei seesawed in and out of positive territory

throughout the day but ended the day down 0.1% at 38,236.07.

Losses were relatively limited, however, as investors

avoided making big moves before the market entered a long

holiday weekend.

The broader Topix declined 0.03% to 2728.53.

The U.S. Federal Reserve met market expectations on

Wednesday, standing pat at the conclusion of its monetary policy

meeting.

The central bank flagged that recent disappointing

inflation readings could make rate cuts a while in coming, but

Fed chief Jerome Powell characterized the risk of more hikes as

"unlikely," giving some solace to markets.

"Many investors were worried the Fed may hike (again) if

inflation continued to remain high, but Fed Chair Powell

suggested that the likelihood of further rate hikes is low, so I

think that was assuring," said Kenji Abe, an equities strategist

at Daiwa Securities.

But any relief was largely overshadowed by a surge in the

yen in what traders suspect to be another round of intervention

by Tokyo following the Fed's meeting.

The Japanese currency's sharp rebound weighed on

export-related shares such as Toyota Motor ( TM ), down 0.7%,

and Honda Motor ( HMC ), falling 0.3%, which tend to benefit

from a weaker yen.

At the same time, U.S. stocks were mixed overnight, with the

Philadelphia Semiconductor Index in particular taking a

hit after weak quarterly results from tech firms Advanced Micro

Devices ( AMD ) and Super Micro Computer ( SMCI ).

The snag in the tech rally abroad capped gains by Japanese

shares in the sector. Chip-related share Tokyo Electron ( TOELF )

was up 0.2%, while Advantest ( ADTTF ) slid 0.7%. AI-focused

startup investor SoftBank Group ( SFTBF ) rose a mere 0.05%.