TOKYO, Aug 4 (Reuters) - Japanese shares slid the most

in two months on Monday as concerns mounted over the U.S.

economy and trade, while speculation grew over a potential

upheaval in domestic politics.

The Nikkei 225 Index of shares closed 1.25% lower,

its steepest one-day slide since June 2. At one point, the gauge

was down as much as 2.3%.

The broader Topix declined 1.1%, with a

sub-index of bank stocks sliding 3.2%.

U.S. shares fell sharply on Friday after data showed that

the world's largest economy created fewer jobs than expected in

July, while June's job growth was revised sharply lower, and a

new round of punishing tariffs cast a shadow on global trade.

Tariffs that U.S. President Donald Trump imposed last week

on dozens of countries are likely to stay in place rather than

be cut as part of continuing negotiations, U.S. Trade

Representative Jamieson Greer said.

The tariffs include a 35% duty on many goods from

Canada, 50% for Brazil, 25% for India, 20% for Taiwan and 39%

for Switzerland.

On the home front, speculation grew that Prime Minister

Shigeru Ishiba might resign after last month's election defeat.

Ishiba has consistently denied plans to step down after his

ruling coalition lost its majority in the upper house of

parliament, but pressure from within his Liberal Democratic

Party is mounting.

"We had very weak job market data in the U.S. and sentiment

among investors has darkened," said Kenji Abe, chief strategist

at Daiwa Securities.

"There is some chance that Prime Minister Ishiba may be

forced to step down, so I think that's one thing we should

watch."

Yamaha ( YAMCF ) sank 8%, leading declines on the Nikkei

gauge after the musical instrument maker cut its full-year

profit forecast, citing the expected effect of U.S. tariffs.

Toyota Motor ( TM ) dropped 1.8% as a rebound in the

yen dented earnings prospects for exporters.

Going against the trend, Nintendo ( NTDOF ) soared 5.1% on

its report of strong demand for its Switch 2 gaming systems.

There were 48 advancers on the Nikkei index against 174

decliners. After Yamaha ( YAMCF ), the biggest loser was Credit Saison ( CSASF )

, which slid 6.6%.

The largest percentage gainers on the index were Nintendo ( NTDOF ),

followed by chipmaker Socionext ( SOCNF ), which gained 4.8%.

(Reporting by Rocky Swift in Tokyo; Editing by Harikrishnan

Nair and Subhranshu Sahu)