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

slipped more than 2% on Thursday, following sharp losses on Wall

Street after the U.S. Federal Reserve held interest rates

steady, while domestic investors awaited the Bank of Japan's

decision due later in the day.

The Nikkei was down 2.6% at 53,780.44, as of 0020

GMT, while the broader Topix slipped 1.82% to 3,649.82.

"Japanese stock market tracked the weakness of U.S. shares

overnight, and the market still weighed the impact of the Middle

East conflict, but the declines will be temporary," said

Hiroyuki Ueno, chief strategist, Sumitomo Mitsui Trust Asset

Management.

Wall Street ended sharply lower on Wednesday after the Fed

stood pat on rates and projected only a single reduction for the

year as officials took stock of economic risks from surging oil

prices and the U.S.-Israel war with Iran.

Shares related to Japanese chipmakers and artificial

intelligence dropped on Thursday, with Advantest ( ADTTF ) and

Tokyo Electron ( TOELF ) down 4.91% and 3.08%, respectively.

SoftBank Group lost 3.39%.

The Bank of Japan is expected to keep its interest rates

steady after it concludes a two-day policy meeting, as it awaits

more clarity on the economic impact of the Middle East conflict.

"The market is not seeing the BOJ's decision as a

market-moving cue today. BOJ Governor (Kazuo) Ueda is expected

to repeat what he has been saying about the future rate path,"

said Ueno.