(Updates with details and closing prices)

TOKYO, June 5 (Reuters) - Japanese shares ended lower on

Thursday, with automakers leading the declines, as weak U.S.

economic data fuelled caution toward the outlook of the world's

largest economy.

The Nikkei closed 0.51% lower at 37,554.49, while

the broader Topix lost 1.03% to 2,756.47.

Overnight, U.S. data showed the smallest gain in private

payrolls since March 2023 while the service sector contracted

for the first time in about a year.

"The market had not expected to see the weak data out of the

U.S., so now investors have become cautious about Friday's

employment report," said Shuutarou Yasuda, a market analyst at

Tokai Tokyo Intelligence Laboratory.

"But the weak economic data means the Federal Reserve may

lower interest rates, which is positive for equities. So

investors do not have to switch to risk-off mode," Yasuda said.

Shares of Suzuki Motor ( SZKMF ) dropped 3% after a Reuters

report revealed the automaker had suspended production of its

Swift model, citing disruptions tied to China's rare-earth

export restrictions.

Toyota Motor ( TM ) and Honda Motor ( HMC ) fell 2.72%

and 2.67%, respectively, pressured by the yen's overnight gain

against the dollar.

Overall, automakers and auto parts makers fell

4.66%.

The dollar weakened across the board overnight, sending the

yen as high as 142.6. The yen was last down 0.3% at

143.185.

A stronger Japanese currency tends to hurt shares of

exporters, as it decreases the value of overseas profit in yen

terms when repatriated to Japan.

Bank shares fell as U.S. Treasury yields declined overnight,

with Mitsubishi UFJ Financial Group ( MUFG ) and Sumitomo Mitsui

Financial Group ( SMFG ) slipping 1.39% and 0.93%, respectively.

Chip-related heavyweights rose to track overnight gains in

the technology-heavy Nasdaq Composite.

Advantest ( ADTTF ) jumped 4.57% and Tokyo Electron ( TOELF )

rose 3.78%, providing the biggest support to the Nikkei.

Of more than 1,600 stocks trading on the Tokyo Stock

Exchange's prime market, 34% rose, 61% declined and 4% were

flat.