Nikkei flat in choppy trade as profit-taking offsets U.S. optimism
* Canon soars after Nikkei says profit likely risen 50 pct * Foreigners net sellers last week By Ayai Tomisawa TOKYO, April 17 (Reuters) - Japan's Nikkei share average was flat in choppy trade on Thursday morning as profit-taking from the previous day's big gains offset strength in U.S. shares which rose on confidence that the Federal Reserve will keep the interest rates low. Canon Inc outperformed the market, surging 2 percent and was the sixth most-traded stock by turnover after the Nikkei daily reported that the manufacturer's operating profit likely rose 50 percent for the January-March quarter. The Nikkei share average dropped 0.1 percent to 14,407.73 in mid-morning trade after flirting with positive territory and hit a one-week high of 14,500.66 earlier, moving far away from a six-month low around 13,885 hit earlier this month. The index rose 3 percent on Wednesday. Exporters were mixed, with Toyota Motor Corp shedding 0.7 percent, Honda Motor Co falling 2.1 percent, while Kyocera Corp adding 1.3 percent. Bank of Japan Governor Haruhiko Kuroda said on Thursday morning that the central bank will adjust monetary policy when needed and reiterated that Japan was making steady progress toward achieving its 2 percent inflation target as the economy continues to recover moderately. "There was nothing new in Kuroda's comments. Investors continue to wait for new cues, especially any inspiring comments from officials," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. Short-term hedge funds have sold Japanese stocks heavily recently on such concerns as a rout in U.S. tech shares and worries that the BOJ may not ease further. Foreign investors turned net sellers of Japanese stocks for the week ending on April 12, capital flows data showed on Thursday. Foreigners sold a net 83.5 billion yen worth of shares in the week through Apr. 12, after buying a net 223.1 billion yen in the week before that. However, a Bank Of America Merrill Lynch survey showed that global fund managers' equity allocations remain overweight on Japan, although a 8 percent of the managers are underweight the region for the 12 months. Investors continue to focus on such macro factors as moves by the Japanese government and the BOJ, Merrill said. "Prime Minister Shinzo Abe is set to unveil his new growth strategy in June, and the stock market is looking for a cut in the corporation tax rate: a phased cut to 25 percent from 35 percent would be a positive surprise," equity strategist Naoki Kamiyama wrote in a report. "Another positive would be additional easing by the BOJ before July." In the U.S., stocks rose after Fed Chair Janet Yellen reaffirmed the central bank's commitment to keeping interest rates low even after ending its bond-buying programme, as long as inflation remains below target and unemployment elevated. The broader Topix rose 0.1 percent to 1,167.42, and the new JPX-Nikkei Index 400 advanced 0.1 percent to 10,625.97.