(Updates with closing prices)

By Junko Fujita

TOKYO, June 2 (Reuters) - Japan's Nikkei share average

retreated on Tuesday from a record high hit in the previous

session, as investors cautiously assessed Middle East peace

talks, with broader geopolitical uncertainties weighing on risk

appetite.

The index recovered some of its early losses as high-flying

memory-chip maker Kioxia ( KXHCF ) reversed course to jump nearly

7% ahead of a scheduled investor meeting later in the day.

The Nikkei ended down 0.3% at 66,734.24, after

falling as much as 2% earlier in the session. The broader Topix

edged down 0.42% to 3,924.24.

The Nikkei touched a record peak of 67,231.28 on Monday and

posted a record closing high of 66,934.33, roughly 7% above the

25-day moving average, a sign of an overheated market.

"There was a caution for the Nikkei's sharp rally, and the

optimism for the early end of the Middle East conflict weakened

and the oil prices rose," said Daisuke Hashizume, senior

strategist at Daiwa Securities.

Uncertainty looms over the status of ceasefire talks between

the U.S. and Iran and the potential reopening of the Strait of

Hormuz.

U.S. President Donald Trump said on Monday that talks with

Iran were ongoing, while Tasnim news agency reported that Tehran

had suspended indirect negotiations with Washington.

In Japan, electronic components maker TDK and robot

maker Fanuc ( FANUF ) fell 2% each, dragging the Nikkei lower the

most.

Technology investor SoftBank Group ended 1% higher

after choppy trade. Fibre-optic cable maker Fujikura narrowed

its loss to fall 2.2%.

Energy stocks bucked the trend, tracking overnight gains in

oil prices, with Inpex ( IPXHF ) climbing 4.42%.

Mining jumped 3.75% to become the Tokyo Stock

Exchange's top-performing sector.

Bank shares rose, with Mitsubishi UFJ Financial Group ( MUFG )

and Mizuho Financial Group ( MFG ) gaining 0.76% and

2.24%, respectively.

Of the nearly 1,500 stocks trading on the TSE's prime

section, 28% rose, 69% fell and 2% traded flat.