* Exporters sink on rising yen * Interest rate worries weigh on property, bank stocks-trader By Ayai Tomisawa TOKYO, June 12 (Reuters) - Japan's Nikkei share average slipped below 13,000 on Wednesday, as the strong yen dragged down exporters in the wake of a sell-off in global equities after disappointment over a lack of fresh measures from the Bank of Japan to quell bond market volatility. The Nikkei fell 1.8 percent to 13,072.61 at the midday break after falling as low as 12,994.08. On Tuesday, U.S. stocks and European shares tumbled, while the dollar sank against the yen on the back of the BOJ's decision to skip fresh steps to calm turbulence in the government bond market. "Although investors were already frustrated after yesterday's BOJ outcome, the bad mood was exacerbated by the negative reaction overseas," said Yutaka Miura, a senior technical analyst at Mizuho Securities. But after the index dipped below the 13,000 mark, short-covering kicked in, lifting the index above the line. "A level above 13,000 is appropriate given expectations that companies will report strong earnings from the second half of the fiscal year," said Kenji Shiomura, an analyst at Daiwa Securities. "When the dollar fell below 96 yen, it startled the market, but as long as it is above that level against the yen, anything below 13,000 is cheap." Most Japanese exporters have set their foreign exchange assumptions between 90 yen-95 yen to the dollar for the year ending March, raising the prospect of strong earnings compared to the previous year as the weaker yen lifts their competitiveness overseas as well as their profits when repatriated. Exporters weighed on the index, with Toyota Motor Corp dropping 3.2 percent, Honda Motor Co falling 2.9 percent and Toshiba Corp shedding 2.8 percent, after the yen rose to 95.60 yen against the dollar on Tuesday. It was a gain of more than three percent, marking its biggest one-day percentage move since March 16, 2011. The yen last traded at 96.53 yen against the dollar. The Topix dropped 2.1 percent to 1,078.24. Reflationary stocks such as banks and real estate stocks underperformed on worries about a potential rise in mortgage interest rates if the long-term interest rate rises steeply in volatile trade again. "Until volatility completely calms, investors will stay on the sidelines," said Hajime Nakajima, deputy general manager at Cosmo Securities, adding that investors who expected the central bank to announce measures to calm volatility in the bond market were selling on disappointment. Mitsubishi UFJ Financial Group fell 3.6 percent, Sumitomo Mitsui Financial Group dropped 3.2 percent and Mitsui Fudosan Co tumbled 4.5 percent. The Japanese market has been under heavy selling pressure over the past few weeks, hit by slowing growth in China and worries the U.S. Federal Reserve would scale back its stimulus this year. Disappointment over lack of details in the Japanese government's growth strategy unveiled last week had also weighed on stocks. Relentless weakness in the yen and high expectations over Prime Minister Shinzo Abe's sweeping policies to revive the world's third-biggest economy underpinned the Nikkei's 60-percent-plus rally this year to a 5-1/2-year high on May 23. The Nikkei has fallen nearly 18 percent since hitting the multi-year peak in May, but is up 5.7 percent since the BOJ's radical monetary expansion campaign was announced on April 4 and has risen 26 percent so far this year.