* Nikkei falls below key technical level
* Market expects BOJ to buy ETFs - analyst
* Some investors may find bargain hunting opportunities - analyst
By Ayai Tomisawa
TOKYO, Aug 29 (Reuters) - Japan's Nikkei share average fell to its lowest in almost four months on Tuesday, as a missile fired by North Korea over northern Japan put investors on edge and increased the yen's safe-haven appeal.
The Nikkei was down 0.6 percent to 19,330.95 at 0247 GMT, not too far from a low of 19,280.02 hit earlier in the session, its weakest since May 1. The benchmark index also fell below its 200-day moving average for the first time since last November.
The dollar was down 0.42 percent at 108.770 yen after hitting 108.320, its lowest since April 18. The yen tends to benefit during periods of geopolitical stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis materialize.
North Korea fired a missile that flew over Japan and landed in the Pacific waters off the northern region of Hokkaido, South Korea and Japan said, in a sharp escalation of tensions on the Korean peninsula.
Japanese Prime Minister Shinzo Abe said on Tuesday that he agreed with U.S. President Donald Trump in telephone talks to increase pressure on North Korea after the latest missile launch.
"The market was spooked after the dollar dipped below 108.50 yen," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
But Fujito added that selling may ease in the afternoon on expectations that the Bank of Japan will buy exchange-traded funds (ETFs) as the market slid in the morning.
"Optimistic investors may think the market drop has created a bargain hunting opportunity as some stocks' valuations are so cheap," Fujito added.
Some exporters are up, including Nissan Motor Co up 0.1 percent, Subaru Corp 0.3 percent higher and Hitachi Ltd up 0.6 percent.
Brokerage stocks were hit, with Nomura Holdings down 1.3 percent and Daiwa Securities down 0.9 percent.
Meanwhile, Kumagai Gumi soared 3.8 percent after the Nikkei business daily reported the company's dividend payout ratio would likely rise to up to 30 percent as early as the year ending March 2019.
The broader Topix dropped 0.3 percent to 1,595.79. (Editing by Himani Sarkar)