(Updates with details and closing levels)

By Brigid Riley

TOKYO, May 30 (Reuters) - Japan's Nikkei share average

ended lower for a third consecutive session on Thursday,

tracking the headwind from a slump on Wall Street while a spike

in global yields also dampened sentiment.

The Nikkei finished 1.3% lower at 38,054.13, its

lowest closing level since April 26. Earlier in the session, the

index dropped as much as 2.4% to 37,617.00.

The broader Topix slipped about 0.6% to 2,726.20.

Weighing on the market was the overnight dip in U.S. stocks

as Treasury yields rose to four-week highs amid concerns

continued over the timing and scale of possible U.S. interest

rate cuts.

Meanwhile, the 10-year Japanese government bond (JGB) yield

hit its highest level since July 2011 at 1.1% as investors bet

on another rate hike in Japan as soon as July and remained wary

about the tapering of the central bank's bond purchases.

While low compared with their U.S. peers, higher JGB yields

still had a significant impact on market sentiment, said Hiroshi

Namioka, chief strategist at T&D Asset Management.

"It's a bit of a psychological shock for market players who

haven't seen yields rise like this until now, or rather, who

have become numb as easy monetary policy continued for such a

long time."

Technical reasons such as end-of-the-month portfolio

rebalancing also contributed to the Nikkei's steep decline, he

said.

Top technology shares, which rising yields tend to weigh on

as higher rates make borrowing more expensive, were among some

of the biggest drags in the index.

Among chip-related stocks, Advantest ( ADTTF ) fell 6.1% to

become the worst percentage performer of the day, while Tokyo

Electron ( TOELF ) dropped 2.5%. Together the big-name shares

swiped about 177 index points off the Nikkei.

AI-focused startup investor SoftBank Group ( SFTBF ) slipped

2.3%.

Among other heavyweight shares, Uniqlo parent firm Fast

Retailing ( FRCOF ) declined 2.1% and Toyota Motor ( TM )

slumped 1.8%.