(Adds fund manager comments in paragraphs 4-5, 9; updates stock

prices)

TOKYO, May 22 (Reuters) - Japan's Nikkei share average

fell to a two-week low on Thursday, as investors turned risk-off

after sharp declines on Wall Street and a spike in U.S. Treasury

yields stoked worries about a flight from U.S. assets.

As of 0222 GMT, the Nikkei was down 0.8% at

36,998.73, after dropping to 36,873.61, the lowest since May 8.

The broader Topix slipped 0.56% to 2,717.68.

"Caution emerged that there may be another sell-off of U.S.

assets. U.S. Treasury yields rose, but the U.S. dollar

weakened," said Naoki Fujiwara, senior fund manager at Shinkin

Asset Management.

"The sell-off of U.S. assets overnight reminded the

market of the rout in April after (U.S. President Donald)

Trump's tariff announcements in April," he said.

Overnight, U.S. stocks closed sharply lower as Treasury

yields spiked on worries that U.S. government debt would swell

by trillions of dollars if Congress passes Trump's proposed

tax-cut bill.

Longer-dated U.S. Treasury yields rose overnight after the

Treasury Department's $16 billion sale of 20-year bonds saw soft

investor demand.

The yen strengthened against the dollar and was

last up 0.24 % at 143.32.

Investor sentiment eased due to limited yen gain after

the top financial officials of the U.S. and Japan agreed that

the dollar-yen exchange rate currently reflects fundamentals,

said Shinkin's Fujiwara.

A stronger yen typically weighs on exporter shares by

reducing the value of overseas earnings when converted back into

Japanese currency.

Among individual stocks, chip-related Tokyo Electron ( TOELF )

and Advantest ( ADTTF ) fell 3.42% and 3.27%,

respectively, dragging the Nikkei the most.

Railway operator Keisei Electric Railway ( KELRF ) shed 9.8%

to become the biggest percentage loser on the Nikkei so far on

Thursday.

Cable maker Furukawa Electric ( FUWAF ), a gauge for

AI-related investment, jumped 7.7% to become the top performer.