TOKYO, Dec 13 (Reuters) - Japan's Nikkei share average

fell on Friday, as investors locked in profit following a

four-session climb after U.S. economic data raised bets of an

interest rate reduction by the Federal Reserve next week.

The Nikkei was down 1.23% at 39,360.43 by the midday

break, but has gained nearly 2% so far this week. In the

previous session, gains propelled the benchmark index to a

two-month high.

The broader Topix fell 1.26% to 2,738.05, but on

course for a weekly gain of 1.68%.

"The overnight weak finish of overseas markets dragged

sentiment lower, prompting investors to sell stocks for

profit-booking," said Takehiko Masuzawa, trading head at Phillip

Securities Japan.

"The market wanted to adjust their positions ahead of the

weekend," he said.

The Nikkei crossed the key 40,000 level for the first time

since Oct. 15 in the previous session.

Wall Street pulled back overnight as investors evaluated key

economic indicators ahead of the Federal Reserve meeting next

week.

A U.S. Labor Department report on Thursday showed producer

prices rose 0.4% on a monthly basis in November, compared with

estimates of a 0.2% climb, as per economists polled by Reuters.

Shares of Uniqlo-brand clothing store operator Fast

Retailing ( FRCOF ) lost 2.61% to drag the Nikkei the most on

Friday.

Chip-making equipment maker Tokyo Electron ( TOELF ) fell

2.64%, tracking U.S. chipmakers' 0.91% drop. Silicon

wafer maker Shin-Etsu Chemical ( SHECF ) lost 2.55%.

Oji Holdings ( OJIPF ) surged 10% to become the top

percentage gainer on the Nikkei after the packaging maker

announced a share buyback.

Heavy machinery maker IHI fell 4.56% to become the

biggest percentage loser in the Nikkei.

All but two of the Tokyo Stock Exchange's (TSE) 33 industry

sub-indexes fell.

The pulp and paper makers index rose 3.25% and

the shippers climbed 0.35%.

Of 1,644 stocks in the TSE's prime market, 21% advanced and

75% fell, while 3% traded flat.