(Updates prices at midday recess)

By Kevin Buckland

TOKYO, Dec 19 (Reuters) - Japan's Nikkei share average

slid nearly 1% on Thursday, as traders took cues from an

overnight tumble on Wall Street, with tech shares driving the

decline.

Investors were also cautious ahead of a policy decision from

the Bank of Japan later in the trading day, with most market

participants expecting officials to forgo an interest rate hike

this time following recent media reports from Reuters and other

news outlets.

The Nikkei was trading 0.96% lower at 38,708.38 by

the midday break, while the broader Topix declined

0.49%.

Heavyweight chip-sector stocks were the biggest drags on

the Nikkei, with Advantest ( ADTTF ) down 3.49% and Tokyo

Electron ( TOELF ) losing 1.62%. Shares of artificial

intelligence-focused startup investor SoftBank Group

tumbled 4.32%.

Overnight, shares in U.S. chipmaker Micron Technology ( MU )

slumped after the company's below-consensus profit and revenue

forecast pointed to a sluggish global demand.

The tech-heavy Nasdaq dropped 3.6% on Wednesday, and

the broader S&P 500 sank 2.9%.

Wall Street was broadly pressured by the Federal Reserve's

signals of a cautious pace of easing next year.

The Fed's hawkish stance sent U.S. Treasury yields soaring,

causing Japanese Government Bond yields to rise as well.

As a result, real estate was one of the worst-performing

sectors on the Nikkei, while financials, despite being lower

overall, were among the top performers.

Meanwhile, the market-implied odds of a BOJ hike on Thursday

were virtually zero ahead of the decision, which typically comes

after 0230 GMT, though the exact timing is not fixed.

"As much as the data is making the case for a December hike,

reading the BOJ tea leaves, it is clear the Bank has a

preference to wait a little bit longer," said Tapas Strickland,

head of market economics at National Australia Bank, who expects

a quarter-point rise in January.

Shares of Nissan Motor ( NSANF ) were volatile, soaring as

much as 7% but also dropping by 3.4% following a local media

report that merger talks with Honda ( HMC ) could begin on

Monday. At the midday break, Nissan ( NSANF ) shares were up 3.14%, while

Honda ( HMC ) fell 2.05%.