(Updates levels as of 0600 GMT)

By Brigid Riley

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

fell in choppy trade on Thursday, weighed down by a stronger yen

and losses in semiconductor-related stocks, while investors

await U.S. non-farm payroll data to gauge the strength of the

world's largest economy.

The Nikkei closed at its lowest level since Aug. 14,

dropping 1% to 36,657.09, its third consecutive session of

losses.

The broader Topix erased early gains to end 0.5%

lower at 2,620.76.

The yen touched a one-month high of 143.20 earlier in

the session, and has strengthened 1.8% so far this week.

A stronger local currency tends to hurt exporter shares as

it decreases the value of overseas profits in yen terms when

firms repatriate them to Japan.

"The labour data out so far this week has not really cooled

concerns about the U.S. economy, and there is a slight tilt

towards expecting the Fed's first rate cut to be of a larger

magnitude," making the dollar/yen prone to more slides, said

Charu Chanana, global market strategist and head of FX strategy

at Saxo.

Coupled with expectations for more rate hikes from the Bank

of Japan, these currency dynamics "could continue to take some

of the speculator froth out of Japanese equities."

Investors will focus attention on a reading on the U.S.

services industry and jobless claims data due later in the day,

but the week's key concern will be Friday's hotly anticipated

August report for nonfarm payrolls.

Among exporters, automaker Toyota Motor ( TM ) slumped

2.2% and tech and entertainment conglomerate Sony Group ( SONY )

was down 1.5%.

Chip-related stocks extended losses in the afternoon

session, tracking a slump in AI chip firm Nvidia ( NVDA ) and

other U.S. technology shares on Wednesday.

Japan's Tokyo Electron ( TOELF ) and Advantest ( ADTTF ) down

2.5% and 2.9%, respectively. Advantest ( ADTTF ) counts Nvidia ( NVDA ) among its

customers.

Among individual stocks, Nippon Steel ( NISTF ) reversed from

morning gains to end 0.4% lower. Sources told Reuters on

Wednesday that U.S. President Joe Biden was close to blocking

Nippon Steel's ( NISTF ) takeover of U.S. Steel on national

security risks.

Nikkei heavyweight Fast Retailing ( FRCOF ) fell 3.8% to

inflict the biggest single blow to the index.