(Updates with closing prices)

TOKYO, May 22 (Reuters) - Japan's Nikkei share average

closed at a two-week low on Thursday, as investors turned

risk-off after sharp declines on Wall Street and a spike in U.S.

Treasury yields stoked worries about a flight from U.S. assets.

The Nikkei fell 0.84% at 36,985.87, its lowest close

since May 8.

The broader Topix slipped 0.58% to 2,717.09.

"Caution emerged that there may be another sell-off of U.S.

assets. U.S. Treasury yields rose, but the U.S. dollar

weakened," said Naoki Fujiwara, senior fund manager at Shinkin

Asset Management.

"The sell-off of U.S. assets overnight reminded the market

of the rout in April after (U.S. President Donald) Trump's

tariff announcements," he said.

Overnight, U.S. stocks closed sharply lower as Treasury

yields spiked on worries that U.S. government debt would swell

by trillions of dollars if Congress passes Trump's proposed

tax-cut bill.

Longer-dated U.S. Treasury yields rose overnight after the

Treasury Department's $16 billion sale of 20-year bonds saw soft

investor demand.

The yen strengthened against the dollar and was

last up 0.23 % at 143.36.

Investor sentiment eased due to limited yen gain after the

top financial officials of the U.S. and Japan agreed that the

dollar-yen exchange rate currently reflects fundamentals, said

Shinkin's Fujiwara.

A stronger yen typically weighs on exporter shares by

reducing the value of overseas earnings when converted back into

Japanese currency.

Among individual stocks, chip-related Tokyo Electron ( TOELF )

and Advantest ( ADTTF ) fell 2.43% and 3.22%,

respectively, dragging the Nikkei the most.

Railway operator Keisei Electric Railway ( KELRF ) shed

10.87% to become the biggest percentage loser on the Nikkei.

Cable maker Furukawa Electric ( FUWAF ), a gauge for

AI-related investment, jumped 11.33% to become the top

performer.