(Updates with closing prices)

By Junko Fujita

TOKYO, July 24 (Reuters) - Japan's Nikkei share average

ended more than 2% lower on Friday as a sharp decline in Google

parent Alphabet's shares spurred concerns about heavy AI

spending.

The Nikkei fell 2.73% to close at 64,611.15, but

rose 0.7% for the week after a 6.4% fall in the previous week.

The broader Topix slipped 1.05% to 4,011.31.

The Nikkei has lost nearly 8% so far this month, tumbling

into correction territory last week. Its moves have been heavily

influenced by the tech-heavy South Korean benchmark KOSPI

and the U.S. Philadelphia semiconductor index.

Shares of Alphabet sank 7% overnight after the

company reported higher spending plans while it also burned

cash. Wall Street indexes closed lower, with the Nasdaq

shedding more than 2%.

Concerns resurfaced over whether heavy spending on AI

infrastructure is sustainable after Alphabet shares fell sharply

overnight, said Kazuaki Shimada, chief strategist at IwaiCosmo

Securities.

"The (Nikkei) index has been affected by overseas factors,

not local cues. Many Japanese companies will start reporting

their earnings from today, and if their outlook is strong, the

index's trend may change," said Shimada.

Chip-related shares fell, with Advantest ( ADTTF ) and Tokyo

Electron ( TOELF ) losing 6.02% and 4.99%, respectively.

Technology investor SoftBank Group fell 7.06% and

memory chip maker Kioxia ( KXHCF ) lost 9.49%.

Shares supported by domestic demand rose, with East Japan

Railway ( EJPRF ) and West Japan Railway ( WJRYF ) rising nearly

2% each. Central Japan Railway ( CJPRF ), which runs bullet

trains between Tokyo and Osaka, rose 1.62%.

Otsuka Holdings ( OTSKY ), a maker of Pocari Sweat, climbed

2.2% to become the top percentage gainer on the Nikkei.

Of the more than 1,500 stocks trading on the Tokyo Stock

Exchange's prime market, 40% rose, 56% fell and 3% traded flat.