* Dollar flirts with 113 yen-mark

* Oil shares underperform on weak oil prices in previous session

* Futures trade dominates market direction - analysts

By Ayai Tomisawa

TOKYO, Feb 22 (Reuters) - Japan's Nikkei share average rose in choppy trade on Monday morning as the dollar strengthened against the yen, which helped exporters trim earlier losses and buoyed overall market sentiment.

But oil prices, which slipped in the previous session before rebounding on Monday, hurt oil shares. Inpex Corp stumbled more than 6 percent, while Japan Petroleum Exploration Co shed 1.6 percent.

The Nikkei gained 0.8 percent to 16,100.01 in midmorning trade after falling to as low as 15,816.83 earlier.

"The stock market and the currency market are staring at each other," said Chihiro Ohta, general manager at investment research and investor services at SMBC Nikko Securities. "Investors are trading on futures mostly, and the futures trade will likely set the direction in the market today."

He said that foreign investors such as hedge funds and algorithm traders were seen to be the main players.

Defensive shares outperformed, with food companies and drug makers well bid. Ajinomoto Co rose 2.3 percent, Kikkoman Corp added 1.6 percent, and Takeda Pharmaceutical Co advanced 1.1 percent.

As the dollar was flirting the 113-yen mark, exporters, which were sharply down in early trade, started trimming their losses. At 0146 GMT, the dollar was at 112.96 yen.

Toyota Motor Corp was down 0.4 percent at 5,978 yen, crawling back from an intraday low at 5,850 yen, Nissan Motor Co rose 0.7 percent at 971.8 yen after falling to 952.4 yen earlier.

Sharp Corp soared as much as 3.6 percent after sources told Reuters that the company plans to choose between rival rescue offers as soon as Thursday, as a favoured bid from Taiwan's Foxconn continues to be challenged by a Japanese state-backed investment fund.

On the other hand, Kansai Electric Power tumbled 5.4 percent after saying it had found a pool of contaminated water at a nuclear reactor slated to restart in late February after years of being shut down.

The broader Topix added 0.3 percent to 1,296.22 and the JPX-Nikkei Index 400 advanced 0.5 percent to 11,741.82.

(Reporting by Ayai Tomisawa; Editing by Eric Meijer)