TOKYO, Jan 8 (Reuters) - Japan's Nikkei share average

fell on Wednesday, tracking overnight Wall Street declines after

a batch of upbeat U.S. economic data raised concerns that sticky

inflation could slow the Federal Reserve's pace of monetary

easing.

The Nikkei index declined 0.6% to 39,843.84, as of

0153 GMT, with 163 of its 225 components falling, 60 rising and

two trading flat.

The broader Topix index slid 0.75%, with growth

shares dropping 0.92%, compared with a 0.57% slide for

value shares

The U.S. S&P 500 sank 1.1% on Tuesday, after a report

showed services sector activity accelerated in December, with a

measure tracking input prices surging to a nearly two-year high.

Interest rate-sensitive tech shares slid, with the

tech-heavy Nasdaq index dropping 1.9%.

Chip shares initially fell in Tokyo, but many rebounded over

the course of the morning, with Nomura strategist Kazuo Kamitani

pointing to Nvidia's presentation at CES overnight for

generating new buzz for the sector.

"In the end, expectations for AI, chips and everything of

that sort continue to be high," he said.

He also flagged the psychological line at 39,500 as a

support for the Nikkei.

Nvidia-supplier Advantest ( ADTTF ) rose 1.5% and chip-making

equipment giant Tokyo Electron ( TOELF ) gained 1.7%, after both

shares began the day lower.

Carmakers were overall supported by a weaker yen, which

continued to hover near 6-month lows. A weak local currency

boosts the value of overseas revenues.

Toyota ( TM ) gained 0.8%, while Subaru and Mazda ( MZDAF )

, which are highly dependent on U.S. sales, climbed 1.1%

and 0.7%, respectively.

Uniqlo store operator Fast Retailing ( FRCOF ) slumped 1.3%,

ahead of its earnings presentation on Thursday.