(Updates with closing prices)

By Kevin Buckland

TOKYO, March 6 (Reuters) - Japan's Nikkei share average

narrowly missed out on a record close for a second session on

Wednesday as tech shares weighed on the index following declines

in U.S. peers overnight.

Tech was the worst performing sector on the Nikkei and in

the broader market, precision machinery and electric

machinery were among the bottom three performers from

the Tokyo Stock Exchange's 33 industry groups.

The Nikkei finished the day 0.02% lower at

40,090.78, after several forays above Monday's all-time closing

high of 40,109.23. However, the index never came close to

challenging the record intraday peak at 40,314.64, also set on

Monday.

The broader Topix rose 0.39%, with a sub-index

of value shares gaining 0.71%, while growth shares

edged up 0.07%.

The Nikkei has still surged nearly 20% in 2024, powered

majorly by tech shares amid the global euphoria over artificial

intelligence (AI).

A weakening yen, down about 6% this year, has also made

Japanese stocks more attractive to the foreign funds that have

mainly driven the rally.

"After realising such a steep rally since the start of

the year, it seems like we've now entered a period of speed

adjustment", which is likely to last until the Bank of Japan and

Federal Reserve policy meetings the week after next, said Kazuo

Kamitani, an equity strategist at Nomura Securities.

"Until then, the market will be sounding out a floor"

and as long as the Nikkei does not fall far below 39,000, "it'll

be an indication of an extremely strong market", he said.

Chip-testing equipment maker Lasertec dropped

3.74% to be the Nikkei's biggest percentage decliner. Chip-maker

Renesas lost 3.09%.

Other notable decliners included AI-focused startup investor

SoftBank Group m which fell 1.49%. Uniqlo store operator

Fast Retailing ( FRCOF ) was the biggest drag in terms of index

points with a 0.93% slide.