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

more than 2% on Friday, as a sharp decline in Google parent

Alphabet shares spurred concerns about heavy AI spending.

The Nikkei was down 2.69% at 64,634.04 as of 0112

GMT, while the broader Topix slipped 1.28% to 4,002.09.

The Nikkei has lost more than 7% so far this month, tumbling

into correction territory last week. Its moves have been heavily

affected 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 6.33% and 5.43%, respectively.

Technology investor SoftBank Group fell 7.42% and

memory chip maker Kioxia ( KXHCF ) lost 4.4%.

Shares supported by domestic demand rose, with Central Japan

Railway ( CJPRF ) and East Japan Railway ( EJPRF ) rising 1.17%

and 0.6%, respectively.

Shippers rose, with Kawasaki Kisen and Mitsui OSK

Lines up 0.61% and 0.88%, respectively.

Otsuka Holdings ( OTSKY ), a maker of Pocari Sweat, rose 1.6%

to become the top percentage gainer on the Nikkei.