TOKYO, July 14 (Reuters) - Japan's Nikkei share average

struggled for direction on Tuesday as bargain buying was offset

by renewed inflation and geopolitical concerns.

The benchmark Nikkei 225 swayed between gains and

losses and was last up 0.10% at 67,311.44. The broader Topix

gained 0.41% to 4,023.89.

U.S. stocks fell overnight after Iran said it had again

closed the Strait of Hormuz and U.S. President Donald Trump

announced a reinstated blockade on Iranian ports, driving oil

prices higher and weighing on risk-sensitive assets.

Japan could consider tweaking its state pension fund's

allocation strategy if domestic assets increase in appeal,

Finance Minister Satsuki Katayama said, rekindling expectations

the massive fund may boost purchases of bonds and stocks.

"We are seeing some buying on the dip," said Maki Sawada, an

equities strategist at Nomura Securities. "Concerns over the

situation in the Middle East appear to have intensified."

Central bank policy remained in focus after Reserve Bank of

New Zealand Chief Economist Paul Conway warned that higher oil

costs risk making inflation more persistent, reinforcing signals

of further tightening across major economies.

Market breadth was positive, with 156 advancers on the

Nikkei 225 against 67 decliners and two unchanged.

The largest gainers in the index were Sumco ( SUMCF ), up

6.55%, followed by Tokyo Disneyland operator Oriental Land ( OLCLF )

, 5.26% higher, and advertising giant Dentsu Group ( DNTUF )

, which gained 4.56%.

The largest losers were Yaskawa Electric ( YASKF ), down

9.91%, followed by Fujikura ( FKURF ), 5.25% lower, and Panasonic ( PCRFF )

, which lost 4.16%.

(Reporting by Rocky Swift in Tokyo; Editing by Subhranshu Sahu)