TOKYO, Sept 20 (Reuters) - Japan's Nikkei share average

pared early gains amid a firmer yen on Friday, after the Bank of

Japan kept its interest rates unchanged, as expected, and also

upgraded its assessment on consumption.

The Nikkei share average rose 1.8% to 37,834.09

early in the afternoon session, after entering the midday recess

up 2.1%.

The yen strengthened against the dollar to be about 0.3%

stronger at 142.16, as of 0336 GMT, after initially shrugging

off the policy decision, which came when stock and bond markets

were in the trading break.

Benchmark 10-year Japanese government bond futures

declined 0.08 yen to 144.58 yen. Cash bonds had yet to

trade following the BOJ announcement.

The central bank judged that "private consumption has

been on a moderate increasing trend," a more optimistic

assessment than the previous view that consumption was

"resilient."

Animal spirits have been the question mark for

policymakers, with inflation tracking above the BOJ's target for

more than two years, but much of that due to import prices.

The focus now turns to BOJ Governor Kazuo Ueda's news

conference, due to start at 0630 GMT, after Japanese markets

close.

He is likely to adopt a cautiously hawkish tone, rather than

the "extremely hawkish" posture of the previous policy meeting,

to avoid roiling markets, said Shoki Omori, chief Japan desk

strategist at Mizuho Securities.

"Careful communication will be carried out to incorporate a

rate hike in December or January," Omori said.

"If the hawkish stance is clearly conveyed to the market,

the USD/JPY exchange rate is expected to trend downward."