(Updates at 0600 GMT)

TOKYO, Sept 4 (Reuters) - Japan's Nikkei share average

fell more than 4% on Wednesday, as chip-related stocks followed

AI darling Nvidia ( NVDA ) lower and soft U.S. manufacturing data

reignited fears of a hard landing for the economy.

The Nikkei closed 4.24% lower at 37,047.61, marking

its lowest close since Aug. 15 and biggest decline since Aug. 5.

The broader Topix fell 3.65% to 2,633.49.

"Today's decline was a reaction to the sharp recovery from

the big losses in mid-August," said Tomochika Kitaoka, chief

equity strategist at Nomura Securities.

"The market has turned cautious about the state of the U.S.

economy and will remain cautious until the non-farm payrolls

data due on Friday."

The Nikkei fell more than 12% to 31,458.42 on Aug. 5 in its

biggest decline since Black Monday amid U.S. recession fears and

a sharply stronger yen.

On Wednesday, a stronger yen also weighed on local equities,

many of which are exporters.

"What is different now from then is that the yen is no

longer on short positions. Back then, the yen rose as investors

unwound carry trade," Kitaoka said.

Wall Street closed sharply lower on Tuesday, with Nvidia ( NVDA )

tumbling 10% as investors reined in their enthusiasm

about artificial intelligence.

Market sentiment was also hit as Institute for Supply

Management data showed U.S. manufacturing remained subdued.

In Japan, chip-related giants tracked Nvidia ( NVDA ) lower, with

Tokyo Electron ( TOELF ) and Advantest ( ADTTF ) shedding 8.55%

and 7.74%, respectively.

Bucking the trend, Nitori Holdings ( NCLTF ), which imports

most materials for furniture and home interior goods, rose

2.56%.

Fuji Soft jumped 7.36% after U.S. buyout fund Bain

Capital said it would make a counter-offer to buy the software

developer that would exceed a rival offer from equity fund KKR

.

All the 33 industry sub-indexes on the Tokyo Stock Exchange

fell, with energy explorers shedding 6.4% to become

the worst performer.

Of 225 components in the Nikkei, 214 stocks fell, while 11

rose.