(Updates with Nikkei levels, adds analyst comments)

TOKYO, March 7 (Reuters) - Japan's Nikkei share average

fell on Friday, tracking Wall Street's declines overnight and as

a stronger yen weighed on exporters.

The Nikkei was down 1.7% at 37,076.86, as of 0144

GMT, while the broader Topix slipped 1% to 2,723.55.

Wall Street stocks finished lower on Thursday, with the

Nasdaq confirming it has been in a correction since December,

weighed down by market jitters over the uncertainty surrounding

U.S. trade policy.

The Nasdaq has fallen 10.4% from a record-high close on

December 16, meeting a widely used definition of a correction.

An index of chipmakers dropped 4.5% overnight.

"We saw some negative cues for Japanese shares, such as

overnight declines of U.S. stocks and a stronger yen," said

Kentaro Hayashi, a senior strategist at Daiwa Securities.

Chip-making equipment maker Tokyo Electron ( TOELF ) fell

2.66% and chip-testing equipment maker Advantest ( ADTTF ) lost

1.25%. Technology investor SoftBank Group fell 2.5%.

Automakers also fell after the yen rose to a

five-month high against the dollar overnight. Toyota Motor ( TM )

lost 0.78% and Honda Motor ( HMC ) fell 0.83%.

A stronger Japanese currency tends to hurt shares of

exporters, as it decreases the value of overseas profits in yen

terms when firms repatriate them to Japan.

Nissan Motor ( NSANF ) reversed early losses to rise 2.25%

after a report said its directors were due to gather on March 11

to discuss potential successors for CEO Makoto Uchida.

"We have some positive news, such as rising wages in Japan.

That could lift domestic demand," said Hayashi.

Japan's largest labour union umbrella group, Rengo, is

seeing its member unions demand the biggest salary increase in

over 30 years as both the government and central bank look for

signs of sustainable wage growth to drive the economy.

Of the more than 1,600 shares trading on the Tokyo Stock

Exchange prime market, 33% rose, 62% fell and 3% traded flat.