(Updates with closing prices)

By Junko Fujita

TOKYO, July 18 (Reuters) - Japan's Nikkei share average

slipped from a more than two-week high to end lower on Friday as

investors weighed the outcome of the nation's upper house

election on the weekend.

The Nikkei fell 0.21% to 39,819.11. Earlier, it had

risen to as high as 40,087.59, its highest level since July 1,

underpinned by the strong performance of Wall Street.

The S&P 500 stock index and the Nasdaq Composite

both finished at record highs on Thursday, as investors

embraced strong economic data and earnings reports that showed

American consumers remained willing to spend.

For the week, the Nikkei rose 0.63% to snap two straight

weeks of losses.

The broader Topix slipped 0.19% to 2,834.48.

"Investors did not want to take a risk in buying stocks

ahead of the national election on the weekend," said Yugo

Tsuboi, chief strategist at Daiwa Securities.

Prime Minister Shigeru Ishiba's Liberal Democratic Party

(LDP) and its partner Komeito are expected to lose their

majority in the upper house on Sunday.

Strategists now focus on whether Ishiba will remain in his

position or step down after the election, as a gauge of the

nation's potential policy shift, which could lead to a cut in

the national consumption tax.

Chip-related Advantest ( ADTTF ) fell 4.44%, the biggest drag

on the Nikkei.

Disco was the largest percentage loser on the

Nikkei, tanking 8.79%, as the chipmaking device supplier's

quarterly operating profit forecast missed market expectations.

Technology investor SoftBank Group rose 5%, the

biggest percentage gainer and the biggest support for the index.

Chipmaking equipment maker Tokyo Electron ( TOELF ) erased

early losses to end 0.29% higher.

Of more than 1,600 stocks on the Tokyo Stock Exchange's

prime section, 33% rose and 63% fell, and 2% traded flat.