(Updates with closing prices)

TOKYO, Jan 17 (Reuters) - Japan's Nikkei share average

slipped on Friday amid caution ahead of market reaction to

President-elect Donald Trump's inaugural speech next week, while

a stronger yen hurt exporters' shares.

The Nikkei fell 0.31% to close at 38,451.46 after

dropping as much as 1.3% earlier in the session. For the week,

the index has shed 1.58%.

"What's behind the market decline is a concern about a

reaction to the comments from Trump who is due to be inaugurated

on Monday. Investors do not want to take risks for a possible

big swing in the market," said Hiroyuki Ueno, chief strategist

at Sumitomo Mitsui Trust Asset Management.

Japanese equities fell as the yen strengthened on

expectations that the Bank of Japan (BOJ) will raise its policy

rate next week.

"The interest rate hike next week seems to be almost certain

but the BOJ's future rate path is not clear yet. It is natural

for investors to cut their positions under these circumstances,"

said Ueno.

The yen climbed 1.5% against the U.S. dollar this week, the

strongest weekly run since late November 2024.

A stronger yen tends to hurt exporters' shares as it

diminishes the value of overseas profits in yen terms when firms

repatriate them to Japan.

The broader Topix fell 0.33% to 2,679.42, dragged

lower by Toyota Motor's ( TM ) 1.73% decline.

Nintendo ( NTDOF ) fell 4.26% after the gaming company on

Thursday said it would release the Switch 2 console this year.

Banks slid, with Mitsubishi UFJ Financial Group ( MUFG ) and

Sumitomo Mitsui Financial Group ( SMFG ) losing 1.19% and 0.76%,

respectively.

Technology start-up investor SoftBank dipped

1.33% to drag the Nikkei the most. Uniqlo clothing store

operator Fast Retailing ( FRCOF ) slipped 0.37%.

Robot maker Fanuc ( FANUF ) rose 1.33% to lend the

biggest boost to the Nikkei.

Of the more than 1,600 stocks trading on the Tokyo Stock

Exchange's prime market, 41% rose, 54% fell and 3% traded flat.