(Updates at 0600GMT)

TOKYO, May 13 (Reuters) - Japanese shares ended lower on

Monday as investors grew cautious ahead of corporate earnings

reports, while rising Japanese government bond yields weighed on

sentiment.

The Nikkei inched down 0.13% to close at

38,179.46, after slipping below the 38,000 level for the first

time since May 2 earlier in the session.

The broader Topix was down 0.15% to 2,724.08.

"More local companies are set to announce their outlook

but many of them are expected to be conservative so investors

were cautious about buying stocks," said Shoichi Arisawa,

general manager of the investment research department at

IwaiCosmo Securities.

Mitsui Fudosan ( MTSFF ) tanked 5.39% as the developer's

annual net forecast was below market expectations. Peer

Mitsubishi Estate fell 4.11%.

The real estate sector lost 3.26% to become the

worst performer among the Tokyo Stock Exchange's 33 industry

sub-indexes.

Chip-making equipment maker Tokyo Electron ( TOELF ) fell

1.03% to become the biggest drag on the Nikkei.

Earlier in the session, the Bank of Japan cut the amount of

Japanese government bonds it offered to buy in a regular

purchase operation, sending Japanese government bond yields

higher.

"The move was taken as negative for the stock market as this

is a step closer to the normalization of the BOJ's policy, which

raised expectations for a further rate hike," Takehiko Masuzawa,

trading head at Phillip Securities in Tokyo.

Among the gainers, Olympus surged 9.65% after the

medical equipment maker reported its annual operating profit

would quadruple and announced a share buyback.

Honda Motor ( HMC ) rose 1.12% after the automaker said it

would buy back up to 3.7% of its own shares worth 300 billion

yen ($1.93 billion).

KDDI ( KDDIF ) rose 3.69% after the mobile phone company

announced a similar move.

Of the 225 Nikkei components, 87 stocks rose and 136 fell,

while two were flat.

($1 = 155.7600 yen)