TOKYO, March 6 (Reuters) - Japan's Nikkei share average

fell for a second session on Wednesday, as traders locked in

profits following the index's recent surge to an all-time high,

while the overnight drop in the tech-heavy Nasdaq also weighed.

Stocks were under pressure from overnight technology-led

slump on Wall Street, and both precision machinery

and electric machinery were among the bottom three

performers from the Tokyo Stock Exchange's 33 industry groups.

The Nikkei slipped 0.2% to 40,017.31, with

chip-related shares of Renesas, Lasertec and Sumco - the three

biggest percentage decliners - losing more than 3% each.

By contrast, the broader Topix rose 0.14%, with a

sub-index of value shares gaining 0.45%, while growth

shares fell 0.17%.

Overnight, all of the big three U.S. equity indexes slumped

more than 1% each, with the tech-heavy Nasdaq falling

the most. The Philadelphia SE Semiconductor Index dropped

more than 2%.

The Nikkei was still up nearly 20% in 2024, powered majorly

by tech shares amid the global euphoria over artificial

intelligence (AI). A weakening yen, down about 6% this year, has

also made Japanese stocks more attractive to the foreign funds

that have mainly driven the rally.

"After realizing such a steep rally since the start of the

year, if seems like we've now entered a period of speed

adjustment," which is likely to last until the Bank of Japan and

Federal Reserve policy meetings the week after next, said Kazuo

Kamitani, an equity strategist at Nomura Securities.

"Until then, the market will be sounding out a floor," and

as long as the Nikkei doesn't fall far below 39,000, "it'll be

an indication of an extremely strong market," he said.

Among other notable decliners on Wednesday, AI-focused

startup investor SoftBank Group dropped 1.42%, and

Uniqlo store operator Fast Retailing ( FRCOF ) lost more than 1%

to be the Nikkei's biggest drags in terms of index points.