* Nikkei has risen 1.5% this week so far
* Nissan rises after co says to grant Renault seats on key
committees
By Ayai Tomisawa
TOKYO, June 21 (Reuters) - Japan's Nikkei edged lower in
choppy trade 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 dropped 0.2% to 21,429.18
in midmorning trade, having lost early gains. The index has
risen 1.5% and was set to post 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 jump in oil prices spurred buying in mining and oil
shares. Inpex Corp 1605.T surged 3%, Japan Petroleum
Exploration Co 1662.T jumped 3.4% and Idemitsu Kosan 5019.T
soared 3.2%.
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 0.6% and MS&
AD Insurance 8725.T dropped 0.9%.
Nissan Motor Co 7201.T bucked the weakness, rising as much
as 1.4% 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 0.3% to 1,555.28.
Declining issues outnumbered advancing ones 1,129 to 896.
(Editing by Simon Cameron-Moore)