* Markets braced for July trade talks between Japan and U.S.
* Machine tool, construction equipment makers tumble
* Shippers fall on lower metal prices
* Kikkoman soars on the back of falling soybean prices
By Ayai Tomisawa
TOKYO, June 20 (Reuters) - Japan’s Nikkei share average was flat in choppy trade on Wednesday morning as firms that rely on China demand tumbled on trade war worries, with machine tool makers and shippers posting multi-month lows, which offset gains in defensive stocks.
The Nikkei was flat at 22,287.42 at the midday break after swinging between positive and negative territory, while the broader Topix dropped 0.5 percent to 1,734.87.
Machine tool makers led the losses, with Okuma Corp dropping 1.7 percent to a nine-month low of 5,630 yen, DMG Mori stumbling as much as 4.0 percent to 1,540 yen, the lowest since February 2017.
Amada Holdings skidded 2.4 percent to 1,042 yen, the lowest since September 2016 and Makino Milling Machine dropped 2.5 percent to 833 yen, the lowest since last August.
Construction machinery makers Komatsu shed 2.6 percent to a nine-month low, while Hitachi Construction Machinery shed 2.5 percent to 3,470 yen, the lowest since mid-October.
As U.S. President Donald Trump threatened to impose a 10 percent tariff on another $200 billion of Chinese goods and Beijing warned it would retaliate, traders said that the sharp escalation in the trade dispute between the two countries has kept investors risk-averse.
“Most investors are very cautious against further downside risk,” said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “Investors are bracing for the planned talks between Japan and the U.S. next month, so they are refraining from taking positions.”
Trump and Japanese Prime Minister Shinzo Abe earlier this month agreed to make preparations to hold trade meetings in July, which will be based around a new framework focusing on bilateral trade.
Shipping stocks stumbled 2.7 percent and were the second worst sectoral performer after weaker metal prices stoked concerns for falling demand.
Mitsui OSK Lines fell 3.8 percent, while Kawasaki Kisen shed 2.1 percent.
Financial stocks were also hurt by the sour mood, with Mitsubishi UFJ Financial Group falling 1.7 percent and Sumitomo Mitsui Financial Group dropping 2.0 percent.
On the other hand, soy sauce maker Kikkoman soared 3.3 percent after soybeans came under pressure.
Other food processors and beverage drink makers also bucked the weaker trend, with Ajinomoto advancing 1.4 percent and Kirin Holdings soaring 2.8 percent.
Drugmakers attracted buyers, with Daiichi Sankyo rising 5.6 percent and Sumitomo Dainippon Pharma gaining 2.4 percent. (Editing by Sam Holmes)