(Updates with closing prices)

By Kevin Buckland

TOKYO, June 23 (Reuters) - Japan's Nikkei share average

fell on Monday as U.S. attacks on Iranian nuclear sites fueled

risk aversion, while the accompanying jump in oil prices weighed

on the outlook for Japan's economy and corporate earnings.

The Nikkei declined 0.13% to 38,354.09 as of the

close, with 154 of its components declining, versus 69 that rose

and two that ended flat. However, that was well off the lows

from early in the session, when the benchmark index slid around

1%.

The broader Topix slipped 0.36%.

"Owing to the strong sense of uncertainty in the current

situation, many investors are taking a wait-and-see stance,"

said Yutaka Miura, senior technical analyst at Mizuho

Securities.

Drivers of Nikkei direction, including oil and the exchange

rate, "are likely to fluctuate widely in response to any

developments in the Middle East".

Japan, which imports almost all of its oil, is highly

sensitive to crude prices that surged to six-month peaks on

Monday as traders waited nervously to see Iran's response to the

U.S.'s entry into the conflict. Japanese manufacturers are also

vulnerable to energy price spikes.

At the same time, analysts pointed to the yen's decline to a

nearly six-week low versus a broadly stronger U.S. dollar as

providing support to shares in Japan's heavyweight exporters,

whose overseas revenues gain in value when the yen weakens.

"The rise in the dollar-yen interest rate has been very

clearly helpful for the Nikkei's performance," said Yunosuke

Ikeda, chief macro strategist at Nomura Securities.

The safe-haven yen is weakening because "investors seem more

focused this time on the impact of higher oil prices on Japan's

trade balance," Ikeda said.

Chip stocks underperformed, with Advantest ( ADTTF ) and

Tokyo Electron ( TOELF ) the biggest drags in index-point terms,

falling 1.23% and 1.17%, respectively.

Oil explorers were among the best-performing stocks, with

the Topix mining sub-index climbing 1.49% to sit at

the top of the 33 industry sub-indexes.