TOKYO, May 28 (Reuters) - Japan's Nikkei share average edged lower on Tuesday as investors weighed the likely timing of further Bank of Japan policy tightening, while chip-related stocks retreated after last week's gains.

The Nikkei slipped 0.11% to 38,855.37 as of the close, although winners and losers were balanced, with 120 stocks rising versus 101 that fell, with four flat.

The broader Topix declined 0.08%, with an index of growth shares sliding 0.37%, while value shares added 0.50%.

Nomura Securities strategist Maki Sawada said that considering the yen and domestic bond yields were little changed in the latest session, and U.S. markets were shut for a holiday on Monday, "in an environment like this, movements in the Nikkei are likely to be blunted."

The BOJ's next policy-setting gathering is scheduled for June 13-14, and investors are wary of a hawkish outcome as a weakening currency has seen officials including Governor Kazuo Ueda take more hawkish stances.

Banking shares continued their rally on the prospect of higher interest rates buoying profits from lending and investing. The Topix banking index added 1.47% to reach the highest since December 2007.

Utilities were another bright spot, led by Furukawa Electric's jump of more than 9%. Kansai Electric advanced 5.50%.

At the other end, chip-sector shares, which rose after Nvidia's bullish earnings last week, took a step back.

Chip-testing equipment manufacturer Lasertec was both the biggest points drag on the Nikkei and the biggest percentage decliner with a 3.19% slide. Peer Advantest, which counts Nvidia as a customer, declined 0.92%. (Reporting by Kevin Buckland; Editing by Rashmi Aich and Janane Venkatraman)