* U.S. shares wilt on reports of gradual pace of tax reform
* Softbank skids, while upbeat forecast lifts Nintendo
* Bank of Japan meeting in focus, with no change expected
By Lisa Twaronite
TOKYO, Oct 31 (Reuters) - Japan’s Nikkei share average slipped on Tuesday, taking its cue from losses on Wall Street after a report that U.S. lawmakers are discussing more gradual corporate tax cuts rather than reducing it more aggressively.
The Nikkei was down 0.4 percent at 21,933.52 at the end of morning trading. On Monday, the Nikkei ended flat after hitting a 21-year intraday high.
U.S. shares fell on Monday after a report that the U.S. House of Representatives was discussing a gradual cut in corporate tax rates over several years.
That echoed what two sources close to the tax discussions told Reuters earlier this month, when they said the plan might be to phase in the 20 percent corporate rate over three to five years by lowering it in stages from the current 35 percent.
“The drawing out of the tax plan just brings more uncertainty to something that didn’t have much clarity to begin with,” Gavin Parry, managing director of Parry International Trading in Hong Kong.
“There was no definite timeline, but the assumption was that it might happen sometime within the next 12 months,” he said.
Investors also kept a wary eye on this week’s central bank meetings.
The Bank of Japan was expected to keep policy unchanged at its two-day meeting ending later on Tuesday, and the U.S. Federal Reserve is also expected to maintain the status quo at its two-day meeting ending on Wednesday.
A slightly stronger currency added to the gloom. The dollar was down 0.1 percent against the yen at 113.10.
U.S. Treasury yields also slipped on news reports that President Trump is likely to appoint Federal Reserve Governor Jerome Powell, who is viewed as more dovish than other contenders, as the next head of the Federal Reserve.
Financial stocks were losers after U.S. yields fell, with the banking subindex shedding 1.4 percent and the securities subindex falling 1.3 percent.
Shares of Nintendo jumped 4.3 percent, a day after the Japanese videogames maker almost doubled its full-year operating profit forecast as supply shortages for its new Switch games console began to ease.
Fujitsu Ltd gained 1.7 percent after Nikkei reported that the company and China’s Lenovo Group are expected to announce a final agreement to integrate their personal computer operations as soon as this week.
Softbank Group Corp tumbled 4.9 percent after sources said it reached an impasse with Deutsche Telekom AG in their talks to merge Sprint Corp and T-Mobile US Inc.
The broader Topix fell 0.4 percent to 1,763.64 and the JPX-Nikkei Index 400 fell 0.5 percent to 15,599.79. (Editing by Jacqueline Wong)