(Updates with closing prices)

TOKYO, March 5 (Reuters) - Japan's Nikkei share average

erased most of its early losses to end flat on Tuesday as

investors bought stocks on dips after the benchmark index

slipped from a record high.

The Nikkei inched down 0.03% to 40,097.63, narrowing

most of its 0.7% loss earlier in the session.

"Investors bought back stocks on dips. Overall, the market

was firm. The Nikkei fell today just because those stocks which

lifted the Nikkei declined," said Naoki Fujiwara, senior fund

manager at Shinkin Asset Management.

After five consecutive weeks of gains, the Nikkei breached

the 40,000 level for the first time on Monday and has risen

nearly 20% so far this year.

Chip-testing equipment maker Advantest ( ADTTF ) slipped

2.64%, weighing the most on the Nikkei, while chip-making

equipment maker Tokyo Electron ( TOELF ) reversed course to end

0.41% higher to become the biggest support for the index.

"Investors sold the chip-related shares, which were

heavily bought in the rally after Wall Street fell overnight,"

said Jun Morita, general manager of the research department at

Chibagin Asset Management.

The three main indexes in the United States ended lower

overnight as investors took a pause ahead of economic data and

Federal Reserve Chair Jerome Powell's congressional testimony.

The broader Topix cut its early losses to end 0.5%

higher at 2,719.93.

Obayashi Corp ( OBYCF ) surged 18% to a daily limit high

after the general contractor raised its dividend forecast. Peers

Kajima Corp ( KAJMF ) and Taisei Corp ( TISCF ) rose 6.49% and

8.81%, respectively.

The construction sector rose 2.96% to become the

top performer among the Tokyo Stock Exchange's 33 industry

sub-indexes.

Fast Retailing edged up 0.25% after the Uniqlo-brand

clothing store operator said its existing store sales in

February rose 7.2% from a year earlier.

Of the 225 Nikkei components, 124 stocks rose and 99 fell,

while two were flat.