(Updates for market close)

By Brigid Riley

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

rose on Tuesday after U.S. President Donald Trump suspended his

threat of steep tariffs on Mexico and Canada, before paring some

gains as tit-for-tat levies ensued between the U.S. and China.

The Nikkei rose as much as 1.8% as investors bought

back shares after the benchmark index logged its worst session

in four months on Monday.

It closed up 0.7% at 38,798.37, while the broader Topix

finished 0.7% higher at 2,738.02.

Trump agreed to a 30-day pause before engaging in further

negotiations with neighbouring Canada and Mexico, alleviating

immediate fears that rattled global markets on Monday.

However, the 10% tariff Trump had vowed to impose on China

came into effect at 0501 GMT, which the world's second-biggest

economy quickly retaliated against, imposing levies on some U.S.

imports.

"The market is still playing with the day-to-day tariff

talk," said Naka Matsuzawa, chief macro strategist at Nomura

Securities.

While the U.S. has little to gain by hurting the Canadian

and Mexican economies through tariffs, it's a "totally different

story" when it comes to its economic rival China, he said.

"It's still highly unpredictable, but you can kind of see

through what Trump says and does."

Japanese automakers were among stocks to rise, after falling

in the previous session when investors weighed how tariffs on

Mexico might impact auto production. Several automakers have

factories in Mexico.

The auto sub-index climbed 1.4% to be one of the

top performers among the Tokyo Stock Exchange's 33 industry

groups, while Toyota Motor ( TM ) finished up 1.7%.

Among individual stocks, domestic company revenue reports

created some of the biggest percentage winners and losers on the

Nikkei.

Ceramics maker Kyocera ( KYOCF ) soared 7.3% and Murata

Manufacturing ( MRAAF ) jumped 5.6%. Mitsubishi Motors ( MMTOF )

slid 14.7% to the bottom of the pack.

(Reporting by Brigid Riley; Editing by Muralikumar Anantharaman

and Sumana Nandy and Varun H K)