(Updates prices ahead of midday trading recess)

By Kevin Buckland

TOKYO, June 16 (Reuters) - Japan's Nikkei share average

edged back from a record high on Tuesday as traders awaited an

expected Bank of Japan interest rate hike later in the day.

Market participants widely expect a quarter-point rate hike

from the central bank and a signal of more to follow. The

decision doesn't come at a fixed time, but is generally

announced between 0300 and 0500 GMT, midway through the trading

day.

The Nikkei declined 0.2% to 69,167.78 by 0145 GMT,

falling back from an all-time peak of 69,682.23 reached on

Monday following an 8% rally over two days.

The broader Topix fell 0.4% to 3,982.45 after also

marking a historic high in the previous session at 4,032.39.

"Rather than there being any particular bad news, this looks

like a retracement after the very steep climb in the Nikkei in

the previous two sessions," said Nomura strategist Maki Sawada.

On the Nikkei, 153 of its 225 components were down, while 70

rose and two traded flat.

Heavily weighted AI stocks were split.

Chip-testing machinery makers outperformed, with Advantest ( ADTTF )

gaining 2.1%, as did data centre plays, with Fujikura ( FKURF )

and Furukawa Electric ( FUWAF ) each up around 5.8%.

Chip-making equipment manufacturers declined, with Tokyo

Electron ( TOELF ) slipping 1.8%.

AI-focused startup investor SoftBank Group ( SFTBF ) lost

1.5%.

(Reporting by Kevin Buckland; Editing by Subhranshu Sahu)