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(Refile to fix the first point after the decision of the BOJ)
* BoJ maintains its ultra-soft monetary policy
* Subaru collapses after its company announced it has suspended the production of the only plant in Japan
* Bridgestone falls after announcing the purchase of Tomtom telematics for $ 1 billion
* December exports fall more than expected
By Ayai Tomisawa
TOKYO, Jan 23 (Reuters) – Japan's Nikkei hesitated on Wednesday. December's weaker-than-expected exports and worries about US-China relations have added to concerns about the prospects of a trade-dependent economy, although softer yen pressure has neutralized exporters.
The average Nikkei share was little changed at 20,631.54 points during the lunch break, after switching between negative and positive territory.
As expected, the Bank of Japan lowered its inflation forecast but maintained its ultra-flexible monetary policy at the end of a two-day meeting on Wednesday.
But trading was the main concern of the day.
A Financial Times report that the US had rejected China's bid for preparatory trade talks has revived concerns over their dispute, though White House economic adviser Larry Kudlow denied it thereafter.
Prior to the opening of the market, Japan had reported that its exports had fallen the most in December for more than two years and more than expected, led by a drop in shipments to China and regional markets, the weakness of global demand and trade friction between the United States and China weighing on the economy.
"Japan is in a difficult position because of its economic dependence on the United States and China. Japan's cyclical stocks depend on demand from both counties, "said Takatoshi Itoshima, strategist at Pictet Asset Management.
Some exporters reduced their declines and rose as the dollar rose 0.3% to 109.64 yen, against 109.4 yen at the start of Asian trade. Advantest Corp added 0.1% and Honda Motor Co., 0.1%.
Subaru Corp has stumbled more than 5% after the automaker said its only car plant in Japan shut down its production a week ago after discovering a defect on a component.
Bridgestone Corp fell 3.7% after the tire maker announced it would buy TomTom's $ 1 billion telematics division.
Japan Display Inc. jumped 11% after the Wall Street Journal announced that the company was in investment talks with Taiwan-based TPK Holdings and Chinese fund Silk Road Fund.
The broader Topix fell 0.2 percent to 1,553.86. Falling problems outweighed problems in progression from 1,349 to 664. (Edited by Kim Coghill)
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