(Updates with closing prices)

By Kevin Buckland

TOKYO, Jan 14 (Reuters) - Japan's Nikkei share average

slumped on Tuesday as investors sold semiconductor stocks after

the U.S. government said it would further restrict artificial

intelligence (AI) chip and technology exports.

The Japanese market, coming off a holiday on Monday, was

also catching up to the global equities selloff after strong

U.S. jobs data on Friday spurred market participants to

contemplate the potential for no Federal Reserve interest rate

cuts this year.

Meanwhile, Bank of Japan Deputy Governor Ryozo Himino,

speech to Japanese business leaders, left the door open to a

rate hike at the conclusion of the next policy meeting on Jan.

24.

The Nikkei index ended the day down 1.83% at

38,474.30. It had dropped as much as 2.26% to 38,305.91 during

the session, its lowest since Dec. 2.

The broader Topix fell 1.16%.

Local government bond yields hit fresh 14-year peaks,

tracking the surge in U.S. yields since the jobs data, weighing

on equities.

Adding to the air of caution was the release of U.S.

consumer inflation data on Wednesday as well as the start of the

U.S. earnings season.

However, "if U.S. earnings are broadly positive, that should

support U.S. stocks and feed through to gains for Japanese

stocks as well," said Maki Sawada, an equities strategist at

Nomura Securities.

On the day, 169 of the Nikkei's 225 components declined,

while 51 rose and five were flat.

The biggest decliner in both percentage and index points

terms was chip-testing equipment maker Advantest ( ADTTF ), an

Nvidia ( NVDA ) supplier, which plunged 9.21%.

Tech was the worst-performing Nikkei sector, sliding more

than 2%.

Japanese earnings reports also spurred some eye-catching

moves.

Yaskawa Electric ( YASKF ) slumped 4.31%, while Ryohin

Keikaku ( RYKKF ), owner of the MUJI stores, rallied 4.67% to be

the Nikkei's biggest percentage riser.

Energy shares outperformed due to a rise in oil prices, with

refiner Idemitsu Kosan advancing 2.11%.