SINGAPORE, July 2 (Reuters) - Japanese shares fell

slightly on Wednesday, reacting to a selloff in U.S. technology

heavyweights and uncertainty about trade tariffs, with the

prospect of Fed interest rate cuts providing markets a floor.

Overnight, as the Nasdaq came further off last

week's record highs, the NYFANG index, which tracks

10 heavily traded tech names, fell 1.8%.

Meanwhile, in comments on Tuesday, Federal Reserve Chair

Jerome Powell kept alive market expectations of a rate cut at

the Fed's upcoming July 29-30 meeting, prompting investors to

slightly boost the possibility of a reduction.

At home, Japanese investors are keeping an eye on key upper

house elections slated for July 20 and the prospect of a trade

deal with the United States, which President Donald Trump has

indicated might not happen by his July 9 deadline for higher

tariffs.

At 0235 GMT, the Nikkei index fell 392.61 points, or

1%, to 39,593.72. While it is down more than 3% this week, the

index has risen nearly 11% since April 2, when Trump unveiled

his reciprocal tariffs.

Kenji Abe, chief strategist at Daiwa Securities, said the

Nikkei's strength was owing to expectations for rate cuts by the

Fed and the rally in global semiconductor shares over the past

month.

"Part of the market participants expected the news that the

trade negotiations between Japan and the U.S. are not going well

because it took such a long time and some people also expected

the trade negotiation regarding auto tariffs not going well," he

said. "So the news that Japan may not reach agreement with the

U.S. is not that surprising."

Tokyo has been scrambling to convince the U.S. to scrap a

25% tariff on Japanese cars and a 24% reciprocal tariff on other

Japanese imports. The reciprocal tariff has been paused until

July 9, but Japan has yet to secure a trade deal after nearly

three months of negotiations.

The broader Topix slipped 0.5%.

The largest percentage gainer in the index was Renesas

Electronics Corp ( RNECF ), up 3.24%.

The biggest decliners in the index were Konami Group Corp ( KNAMF )

, down 6.48%, followed by Kawasaki Heavy Industries ( KWHIF )

losing 5.04% and Fujikura ( FKURF ), falling 4.67%.