* BOJ expected to stand pat at its policy meeting * Advantest, M3 take a beating after disappointing earnings * Sony rises after lifting 2012/13 earnings forecast By Dominic Lau TOKYO, April 26 (Reuters) - Japan's Nikkei share average retreated from a near five-year high, ahead of the outcome of the Bank of Japan meeting, hurt by disappointing earnings from companies like Advantest Corp and M3 Inc. By the midday break, the Nikkei fell 0.4 percent to 13,867.23 after trading as high as 13,983.87 earlier in the session, hitting its highest level since June 2008 and within sight of the 14,000-mark. "Volume is not light but people are waiting for the outcome of the BOJ meeting today. The key focus is how much the BOJ has spent over the course of the last month with regards to its actual target," a senior dealer at a foreign brokerage said. The Bank of Japan is likely to hold off on offering any new policy initiatives at its meeting later Friday after it stunned financial markets on April 4 with a radical monetary expansion program. The central bank promised to buy 7.5 trillion yen ($75.4 billion) of Japanese government bonds a month to lower long-term interest rates and pull the world's third-largest economy out of doldrums. The benchmark Nikkei has surged 60 percent since mid-November, when Shinzo Abe, who became prime minister in December, promised bold expansionary monetary and fiscal policies to revive the economy. During the same period, the yen has weakened nearly 23 percent against the dollar. Investors were locking in profits on shares of real estate financial companies after their recent sharp rally as they were seen as benefiting the most from Japan's reflationary push. The real estate sector dropped 1.4 percent and securities companies lost 1.3 percent. "The market obviously doesn't like earnings disappointment. Things like M3 and Advantest are getting a little bit of a beating," the senior dealer said. Tech concern Advantest sank 8.8 percent and was the top-weighted loser in the Nikkei, while medical equipment maker M3 dropped 5.3 percent after both companies reported disappointing fourth quarter results. Although it is still early in the quarterly reporting season, only two out of the 16 Nikkei companies that have reported so far beat market expectations, data from Thomson Reuters StarMine showed. Construction machinery maker Komatsu Ltd gained 2.2 percent after its operating profit forecast for this financial year ending March 2014 beat market consensus, even though last year's profit failed to meet its twice revised-down estimate. Sony Corp rose 0.6 percent after it raised its operating profit estimate for the year ended March by three-quarters after it counted gains from the sale of its New York headquarters and other asset sales and revalued a stock holding, helping the TV maker cover losses in its consumer electronics business. It was the most traded stock on the main board by turnover. The broader Topix index fell 0.7 percent to 1,164.34, with volume at 54 percent of its full daily average for the past 90 trading days. EARNINGS GUIDANCE THE KEY Canon Inc lost 0.8 percent, extending the previous session's 6.4 percent decline after its annual earnings guidance missed analysts' forecast when it announced its first quarter results after the bell on Wednesday. "New financial year profit guidance has a greater impact on share prices than results surprises. Japanese companies typically issue conservative guidance at the start of the fiscal year," Goldman Sachs strategists wrote in a note. "Given the recent sharp forex move, companies in export-related sectors may set conservative rate assumptions relative to current spot rates, and if this is the case guidance could fall well short of market expectations and be perceived as a headwind." But Citigroup said investors should not be fazed by conservative earnings forecasts for this financial year ending March 2014. "We expect corporate earnings forecasts to be fairly conservative. However, we expect them to be revised up, as well as market consensus forecasts, as we get further into FY3/14, on the pick-up in the economy and previous yen weakening against the dollar," it said in a report, adding that it expected the Topix to reach 1,320 by end-March 2014.