TOKYO, March 18 (Reuters) - Japan's Nikkei share average

jumped more than 2% on Monday, as investors turned bullish after

they learned more about the likely changes to the Bank of

Japan's (BOJ) policy settings due to be announced on Tuesday.

The Nikkei rose 2.1%. to 39,521.43 by the midday

break, while the broader Topix gained 1.51% to 2,711.15.

"Investors were relieved as uncertainties about the changes

the BOJ will make were mostly dispelled after reading reports

from various media outlets," Shoichi Arisawa, general manager of

the investment research department at IwaiCosmo Securities,

said.

The Nikkei newspaper on Saturday became the latest media

outlet to flag the policy move, after major companies granted

the biggest pay hikes in 33 years.

Bigger-than-expected pay hikes by major Japanese firms have

significantly heightened the chance the central bank will end

eight years of negative interest rate policy at the end of a

two-day policy meeting on Tuesday.

If the nine-member board of the BOJ believes the conditions

are right, the central bank will set the overnight call rate as

its new target and guide it in a range of 0-0.1% by paying 0.1%

interest on excess reserves financial institutions park with the

it, Reuters reported.

Upon exiting its negative rate policy, the BOJ will also

ditch its bond yield control and discontinue purchases of risky

assets such as exchange-traded funds.

Uniqlo-brand owner Fast Retailing ( FRCOF ) jumped 3.91% to

become the biggest boost for the Nikkei, followed by chip-making

equipment maker Tokyo Electron ( TOELF ), which rose 2.32%.

"Unless the Fed (U.S. Federal Reserve) defies market

expectations that it would cut the rate this year, the momentum

of the stock market will continue," Hitoshi Asaoka, senior

strategist at Asset Management One, said.

The Fed is considered certain to keep rates at 5.25%-5.5% at

its two-day meeting this week, but there is a possibility it

might signal a "higher for longer" outlook on policy given the

stickiness of inflation at both a consumer and producer level.