Nikkei edges down as airlines, shippers hit by rising oil

* Ex-dividend adjustment takes 30 points off Nikkei - analyst

* JT, Canon, Bridgestone sold on ex-dividend trade

* Higher oil prices pressure rubber products makers, airlines

* Market off early lows on suspected ETF buying by BOJ

By Ayai Tomisawa and Tomo Uetake

TOKYO, June 27 (Reuters) - Japan's Nikkei share average dropped on Wednesday after higher oil prices hurt rubber products makers, airlines and shippers, while companies' going ex-dividend added to the market's broader weakness.

Yet the market came off early lows which traders suspected was linked to Bank of Japan's buying of exchange-traded funds.

The benchmark Nikkei .N225 closed down 0.3 percent at 22,271.77, while the broader Topix .TOPX eked out tiny gains of 0.02 percent to finish at 1,731.45.

Companies whose business years end in December will go ex-dividend on Wednesday, after which investors will no longer qualify for the latest dividend payout.

Market participants estimated the effect of the resulting adjustment to prices would take 30 points off the Nikkei benchmark index.

Among Nikkei companies going ex-dividend on Wednesday are Japan Tobacco 2914.T , Canon 7751.T and Bridgestone 5108.T which stumbled 3.9 percent, 3.0 percent and 3.0 percent, respectively.

Analysts said that investors remain cautious against spiralling global trade tensions between the United States and its trade partners, which has dented the market in the past week.

"We saw some short-covering on value stocks the day before, but the market is still risk averse," said Takuya Takahashi, a strategist at Daiwa Securities.

He added that while higher oil prices somewhat helped U.S. stocks overnight, more companies in the Japanese market were vulnerable to the impact of rising oil prices.

Shares in the rubber products .IRUBR.T , airline sectors .IAIRL.T and sea transport .ISHIP.T , underperformed and tumbled 2.7 percent, 1.4 percent and 1.0 percent, respectively, on worries about rising costs.

Oil prices rose on Wednesday following supply disruptions in Libya and Canada and after U.S. officials told oil importers to stop buying Iranian crude from November. Cabinet Secretary Yoshihide Suga told a news conference on Wednesday that Japan was closely analysing the impact of U.S. sanctions on Iran and would continue to talk with Washington and relevant nations so that Japanese firms would not be adversely affected.

Bucking the overall weakness, Idemitsu Kosan 5019.T and Showa Shell (LON: RDSa ) Sekiyu 5002.T soared after the Nikkei business daily reported Idemitsu's founding family has agreed to plans for a merger with Showa Shell. Kosan and Showa Shell climbed 13.6 percent and 8.5 percent, respectively.

Oracle Corp (NYSE: ORCL ) Japan 4716.T jumped 12.3 percent after the company's parent net profit rose 6.6 percent on year to 38.7 billion yen for the fiscal year ended in May.

(Editing by Jacqueline Wong & Shri Navaratnam)