(Updates with closing prices)

TOKYO, July 1 (Reuters) - Japan's Nikkei share average

snapped a five-day winning streak to fall more than 1% on

Tuesday, as investors sold stocks amid uncertainty over

U.S.-Japan trade talks.

The Nikkei fell 1.24% to 39,986.33, slipping from

the highest level since mid-July, which it reached in the

previous session.

The broader Topix slipped 0.73% to 2,832.07.

"The market was overheated, but there were some factors that

boosted demand last month," said Hiroyuki Ueno, chief strategist

at Sumitomo Mitsui Trust Asset Management.

Japanese equities mirrored a rally in U.S. stocks in the

past several sessions, but demand was also supported by dividend

payouts investors received after corporate shareholders'

meetings in June, as well as corporate share buybacks, said

Ueno.

The Nikkei rose 6.6% in June, marking its biggest monthly

gain since February 2024. In the last five sessions of June, the

index gained 5.5%.

The Relative Strength Index (RSI), a technical measure for

investment momentum, dropped to 66.6 on Tuesday from the

"overbought" condition of 74.5.

Meanwhile, U.S. President Donald Trump expressed frustration

with U.S.-Japan trade negotiations on Monday, casting clouds

over ongoing trade talks between the two countries.

U.S. Treasury Secretary Scott Bessent also warned that

countries could be notified of sharply higher tariffs as a July

9 deadline approaches despite good-faith negotiations.

"Investors weighed trade factors, but if the outlook of the

talks becomes clear, then the market gauges stocks with

fundamentals and the Nikkei has the potential to rise further,"

said Ueno.

Uniqlo-brand owner Fast Retailing ( FRCOF ) fell 4.16% to

drag the Nikkei the most. Chip-equipment maker Tokyo Electron ( TOELF )

slipped 2.2%.

Bucking the trend, utility Tokyo Electric Power Holdings

jumped 9.98% to become the biggest percentage gainer on

the Nikkei.