TOKYO, Dec 19 (Reuters) - Japan's Nikkei share average rallied and the yen sagged on Tuesday, after the Bank of Japan (BOJ) kept stimulus settings ultra-easy and offered no hints of an early end to negative interest rates.

The Nikkei rose 1.23% to 33,163.49 as of 0345 GMT, extending a 0.15% gain from the morning session. The BOJ's announcement came during the midday recess.

The broader Topix reversed a 0.21% loss from the morning to rise 0.75%.

The yen weakened as far as 143.78 per dollar following the announcement, and last traded down about 0.5% at 143.29.

The BOJ kept its short-term rate target at -0.1% and that for the 10-year government bond yield at around 0% in line with expectations. However, it also opted to leave intact dovish guidance that pledged to take additional monetary easing steps "without hesitation" if needed.

"There are extremely high uncertainties surrounding Japan's economy and prices," the BOJ said in a statement.

Speculation had been building in the market for the BOJ to exit negative short-term rates as soon as its meeting next month.

BOJ Governor Kazuo Ueda is scheduled to hold a news conference at 0630 GMT, half an hour after Japan's stock market close.

"Given the markets are preparing for rate-cutting cycles in the U.S. and Europe next year, it's sensible for the BOJ to wait things out and assess global fundamentals," said Kyle Rodda, senior financial market analyst at Capital.com.

The yen is likely to continue to track changes in U.S. yields on the outlook for Federal Reserve policy, while the Nikkei reacts to the exchange rate, Rodda said.

The 10-year U.S. Treasury yield was steady at around 3.94% on Tuesday.

Benchmark 10-year Japanese government bond yields had yet to trade following the BOJ announcement, but last stood 1 basis point higher at 0.67%.

Ten-year JGB futures rose 0.23 points to 146.19. Bond yields move inversely to prices.

Gains in the Nikkei broadened after stimulus settings were left unchanged, with 159 of the index's 225 components rising versus 65 decliners and one that was flat.

Technology shares extended gains, with chip-testing equipment giant Tokyo Electron jumping 3.2% and chip-testing machinery maker Advantest advancing 2.04%.

Automaker shares, which had been heavy in the morning session, lifted as the weakening yen boosted the outlook for overseas revenue.

Toyota Motor gained 1.39% and Nissan rallied 2%. (Reporting by Kevin Buckland; Editing by Rashmi Aich and Janane Venkatraman)