TOKYO, May 28 (Reuters) - Japan's Nikkei share average edged lower on Tuesday, as investors weighed the likely timing of further Bank of Japan policy tightening, while chip-related stocks retreated after last week's gains.

The Nikkei slipped 0.3% to 38,783.27 as of the midday recess, after trading in a narrow and mostly negative range during the morning session.

The broader Topix declined 0.15%, with an index of growth shares sliding 0.56%, while value shares added 0.23%.

Nomura Securities strategist Maki Sawada said that considering the yen and domestic bond yields were little changed in the latest session, and U.S. markets were shut for a holiday on Monday, "in an environment like this, movements in the Nikkei are likely to be blunted."

The BOJ's next policy-setting gathering is scheduled for June 13-14, and investors are wary of a hawkish outcome as a weakening currency has seen officials including Governor Kazuo Ueda take more hawkish stances.

Meanwhile, chip-sector shares, which had been buoyed by such news from last week as Nvidia's bullish earnings, took a step back on Tuesday.

The three biggest drag's on the Nikkei were all semiconductor-related, led by chip-testing equipment giant Tokyo Electron, down 1.29%, and followed by chip-testing equipment manufacturers Lasetec and Advantest, off 3.97% and 1.27%, respectively.

Lasertec was also the index's biggest decliner on a percentage basis, followed by appliance maker Sharp and Tokyo Electron peer Screen Holdings, which dropped 3.21% and 3.17%.

Winners and losers were almost evenly split on the Nikkei though, with 112 stocks rising versus 111 that fell, with two flat.

Utilities were a bright spot, led by Furukawa Electric's 8% jump. Kansai Electric advanced 4.55%. (Reporting by Kevin Buckland; Editing by Rashmi Aich)