(Updates with closing prices) By Kevin Buckland TOKYO, Sept 17 (Reuters) - Japan's Nikkei share average edged lower on Wednesday, tracking an overnight pullback on Wall Street from record highs, ahead of a crucial U.S. Federal Reserve interest rate decision later in the day. The tech-heavy Nikkei <.N225> ended the day down 0.3% at 44,790.38. In the previous session, the benchmark index advanced to a record-high level of 45,055.38. The broader Topix <.TOPX> slid 0.7% to 3,145.83, after marking a record high on Tuesday. The outperformance of chip-sector shares made the difference, as they took cues from the closely watched Philadelphia SE semiconductor index <.SOX>, which rose 0.3% to an all-time high on Tuesday. The Nasdaq Composite <.IXIC> and S&P 500 <.SPX> also renewed record peaks, but closed the day lower. Stocks have soared globally as traders cemented bets for a series of near-term U.S. rate cuts, beginning with one later on Wednesday. Market-implied odds signal at least two quarter-point cuts by year-end, and 95 basis points of reductions by end-March. "The arithmetic is simple: the Fed needs to back up the dovishness currently discounted into the rates curve to keep stocks chugging along," said Kyle Rodda, an analyst at Capital.com. "If the requisite dovishness is absent, that's when things could get spicy in the markets." Chip-making equipment manufacturer Tokyo Electron <8035.T> jumped 5.4% on Wednesday to be the top performer in the Nikkei. Shares of smaller peer Disco <6146.T> gained nearly 2%. By contrast, chip-testing equipment maker Advantest <6857.T> ended a roller-coaster session with a 1.8% loss. Despite a stronger yen against the U.S. dollar, which tends to weigh on exporters as it erodes the value of overseas revenue, Sony <6758.T> gained 1.1% and Toyota Motor <7203.T> rose 0.6%. Of the Nikkei's 225 components, only 58 advanced, 164 fell, and three traded flat. (Reporting by Kevin Buckland; Editing by Sherry Jacob-Phillips) ((Kevin.Buckland@thomsonreuters.com;)) Keywords: JAPAN STOCKS/CLOSE
