(Updates with closing prices)

By Junko Fujita

TOKYO, June 9 (Reuters) - Japan's Nikkei share average ended

higher on Tuesday, as chip-related heavyweights recovered from

heavy losses in the previous session.

The Nikkei closed up 2.17% at 65,416.63. The index

fell 3.85% on Monday, its largest one-day loss in three months.

The Nikkei was choppy earlier in the session, inching down

as much as 0.16%.

The broader Topix rose 1.14% to 3,896.11.

Chip-making equipment maker Tokyo Electron ( TOELF ) jumped

8.91% and chip-testing equipment maker Advantest ( ADTTF ) gained

4.34%, becoming the biggest source for the Nikkei's gain.

Meanwhile, technology investor SoftBank Group and

fibre optic cable maker Fujikura ( FKURF ) reversed earlier

losses and ended 1.03% and 2.23% higher, respectively.

"Confidence for AI-related shares remains strong, but there

was caution for the fast-paced rally in the market earlier in

the session," said Kazuaki Shimada, chief strategist at

IwaiCosmo Securities.

"Investors might have sold stocks to raise money to buy

SpaceX ahead of its initial public offering this week," he said.

The Nikkei crossed above 68,000 to a record high earlier

this month on optimism for the growth of AI-related shares. The

index has risen nearly 30% so far this year.

Monday's heavy sell-off followed sharp declines in U.S.

technology stocks at the end of last week.

Financials rose on Tuesday as the market braced for the Bank

of Japan's interest rate hike at its policy meeting next week.

Mitsubishi UFJ Financial Group ( MUFG ) and Mizuho Financial

Group ( MFG ) rose 0.38% and 1.69%, respectively.

Meanwhile, Uniqlo-brand owner Fast Retailing ( FRCOF ) fell

0.96% to weigh on the Nikkei the most.

Of more than 1,500 stocks trading on the Tokyo Stock

Exchange's prime market, 53% rose, 42% fell, and 3% traded flat.

(Reporting by Junko Fujita; Editing by Rashmi Aich and Varun H

K)