Nikkei drops as investors turn focus to upcoming Trump-Xi meeting

* Nikkei rises 0.7% this week, third straight weekly gains
* Nissan rises after co says to grant Renault seats on key
committees

By Ayai Tomisawa
TOKYO, June 21 (Reuters) - Japan's Nikkei dropped on Friday
as investors awaited cues from U.S.-China trade talks, while oil
and mining shares were in demand amid rising geopolitical risks
in the Middle East.
The Nikkei share average .N225 fell 1% to 21,258.64. The
index rose 0.7% for the week and posted a third week of gains
thanks to hopes that the U.S. central bank will cut interest
rates as early as next month.
Investors' focus has now shifted to a meeting between U.S.
President Donald Trump and China's President Xi Jinping during a
Group of 20 summit in Japan next week, with hopes that they can
put negotiations back on track to de-escalate a trade war.
Trump said that he would decide whether to carry out his
threat to hit Beijing with tariffs on at least $300 billion in
Chinese goods after the meeting.
"If Trump decides not to carry out the threat, the market
will likely rise," said Hiroyuki Ueno, a senior strategist at
Sumitomo Mitsui Trust Asset Management.
Meanwhile, tensions between the United States and Iran
heightened after Iran shot down a U.S. military drone aircraft
in the Gulf region. The resulting jump in oil prices spurred buying in mining
and oil shares. Inpex Corp 1605.T and Japan Petroleum
Exploration Co 1662.T jumped 4.4% and 3.7%, respectively while
Idemitsu Kosan 5019.T soared 2.4%.
Financial shares lost ground after U.S. yields fell on the
likelihood of an interest rate cut as early as next month
following the Fed's policy meeting earlier this week.
Mitsubishi UFJ Financial Group 8306.T dropped 0.7% and MS&
AD Insurance 8725.T dropped 1.2%.
Nissan Motor Co 7201.T bucked the weakness, rising as much
as 1.4% before ending up 0.6% after it said on Friday it would
grant alliance member Renault's RENA.PA representatives seats
on key committees of its board, ending a dispute between the two
automakers. The broader Topix .TOPX dropped 0.9% to 1,545.90.
Declining issues outnumbered advancing ones 1,458 to 619.

(Editing by Simon Cameron-Moore)