(Updates with closing price)

By Satoshi Sugiyama

TOKYO, April 7 (Reuters) - The Nikkei share average

ended flat in choppy trade on Tuesday, as investors balanced

optimism over a potential Middle East ceasefire and unease over

U.S. President Donald Trump's threat to escalate strikes on Iran

if it fails to reopen the Strait of Hormuz.

Japanese economy is particularly vulnerable to the

conflict's impact on shipments and prices, as the country relies

on the Middle East for around 90% of its oil.

Nikkei swung between gains and losses before closing

0.03% higher at 53,429.56. The broader Topix also

struggled for direction, ending 0.3% higher at 3,654.02.

Responding to a U.S. proposal through mediator Pakistan, Tehran

rejected a ceasefire and said a permanent end to the war was

necessary, and pushed back against pressure to reopen the

strait.

It followed increasingly bellicose ultimatums from Trump, who

has threatened to rain "hell" on Tehran if it fails to comply

with his deadline of 8 p.m. EDT Tuesday (0000 GMT Wednesday) to

reopen the strait, through which about a fifth of global oil

supply is normally shipped.

"President Trump appears to be increasingly speaking in a

reactive or ad hoc manner, and his messaging has become less

consistent. As a result, markets no longer seem to be parsing

every remark with the same degree of sensitivity they once did,"

said Hitoshi Asaoka, chief strategist at Asset Management One.

"While he continues to reference specific timelines or

deadlines, investors appear to be placing less credibility on

those dates than they did previously."

There were 142 advancers on the Nikkei index and 81

decliners.

Among individual stocks, software testing company SHIFT

was the best percentage gainer with a 4.3% rise. TDK

, an electronic components maker, gained 2.8%.

Meanwhile, truckmaker Archion lost 7.2% to be the

biggest laggard on the Nikkei index, followed by Disco

, a precision cutting tools supplier for

semiconductors, which declined 6.2%.