October 5, 2017 / 7:11 AM / a year ago

RPT-Nikkei ends flat, hovers around 2-year highs as caution sets in

(Repeats closing report)

* Insurers underperform, Aeon gains on earnings

* Tepco surges after receiving initial safety approval from NRA

By Lisa Twaronite and Ayai Tomisawa

TOKYO, Oct 5 (Reuters) - Japan's Nikkei share average ended little changed on Thursday after hitting a two-year high in the previous session, as investors grew cautious ahead of major economic data such as the U.S. jobs report later this week.

The Nikkei ended up 1.9 points, or 0.01 percent, at 20,628.56. On Wednesday, the index climbed to as high as 20,689.08, its loftiest level since August 2015.

"After a run-up to such high levels, and ahead of such major data as the U.S. monthly jobs figures, it is not surprising at all that some investors would take profits," said Yutaka Miura, a senior technical analyst at Mizuho Securities.

"But on the other hand, with U.S. shares hitting fresh record highs, there are no compelling reasons to aggressively sell Japanese stocks, either, so the overall market is flat," he said.

On Wednesday, U.S. stocks edged up to extend their run of record closing highs as data on the services sector added to signs of strength in the economy and underpinned earnings prospects.

Respondents to Reuters' latest Japanese equities poll were mostly optimistic that the Nikkei will scale a 21-year peak by year-end, boosted by a weaker yen and market expectations that Prime Minister Shinzo Abe will prevail in a snap election he called for Oct. 22.

Weekly fund flow data showed that foreign investors turned to net buying of Japanese shares in the week through Sept. 30, purchasing a net 953.3 billion yen worth of shares.

Still, some were cautious against a backdrop of continuing tensions on the Korean peninsula.

Last Friday, Japanese Defense Minister Itsunori Onodera expressed concerns about more possible provocation from North Korea on Oct. 10, when Japan commences its lower house election campaigns, a date that coincides with one of the North's main anniversaries.

The day's losers included financial stocks, with Dai-ichi Life Holdings falling 1.3 percent. The insurance sub-index sagged 1 percent.

Tech shares and electric parts makers also languished, with Advantest Corp dropping 1.2 percent and Murata Manufacturing Co shedding 0.9 percent, while TDK Corp declined 0.5 percent.

Bucking the weakness, Aeon Co surged 2.1 percent after Japan's largest retailer by sales said it plans further price cuts, as restructuring at its struggling general merchandising stores helped drive first half profits to an 11-year high.

Tokyo Electric Power (Tepco) added 0.9 percent after the company received an initial safety approval from Japan's Nuclear Regulation Authority to restart two reactors at the world's biggest nuclear power plant.

The JPX-Nikkei Index 400 shed 0.2 percent to 14,860.37 while the Topix ended down 0.1 percent at 1,682.49 . (Reporting by Ayai Tomisawa and Lisa Twaronite; Editing by Sam Holmes and Kim Coghill)

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