* Nikkei falls 0.7 pct, Topix sheds 1.2 pct * Daikin Industries came under pressure after Mizuho downgrade * BOJ to hold policy meeting on April 3 and 4 By Dominic Lau TOKYO, April 1 (Reuters) - Japan's Nikkei share average fell to a two-week low on Monday as investors took profit after the benchmark posted its best quarterly performance in nearly four years. Expectations that the Bank of Japan will unveil aggressive monetary policy measures this week to revive the world's third-largest economy would offer some support. The Nikkei eased 0.7 percent to 12,307.71 after rallying 19.3 percent in January-March, marking its best quarterly performance since April-June 2009, as Prime Minister Shinzo Abe embarked on expansionary fiscal and monetary policies. Helped by the rally, Japanese equities carry a 12-month forward price-to-earnings ratio of 14.2, a level not seen since July 2010 though still below the 10-year average of 16.4, according to Thomson Reuters Datastream. "There was a very large inflow (of programme trade) on Friday afternoon ... I reckon the fair value absent of that buying is at where we are," a senior trader at a foreign bank in Tokyo said. "Flow is very light out there today," he said. "I don't think many people want to do much ahead of the BOJ on Thursday." However, the trader said he was cautious as many domestic investors were likely to take profit at the start of Japan's financial year, which began on Monday. Shares succumbing to profit-taking included Softbank Corp , Shin-Etsu Chemical and Sony Corp, down between 1.6 and 2.6 percent. Daikin Industries Ltd shed 3 percent after Mizuho Securities cut its rating on the air-conditioner maker to 'neutral" from 'buy.' The broader Topix index shed 1.2 percent to 1,022.39. The central bank will hold a two-day policy meeting starting on April 3, its first under new Governor Haruhiko Kuroda, an advocate of aggressive monetary policy. A BOJ survey showed big manufacturers' mood improved after two straight quarters of deterioration, with the headline sentiment index rising 4 points to minus 8. That was roughly in line with a median market forecast of minus 7.