(Updates with closing prices)

By Junko Fujita

TOKYO, July 4 (Reuters) - Japan's Nikkei ended slightly

higher on Friday, as chip-related stocks tracked Wall Street's

strong overnight performance, but the index snapped a three-week

winning streak on caution ahead of the U.S. trade deal deadline.

The Nikkei was up 0.06% at 39,810.88, after hitting

an intraday high of 40,012.66.

The benchmark index fluctuated between negative territory

and modest gains throughout the session. For the week, the

Nikkei slipped 0.85%, snapping a three-week winning streak.

The broader Topix was flat at 2,827.95.

"Investors remained optimistic about the market outlook, but

the Nikkei is still vulnerable," said Shuutarou Yasuda, a market

analyst at Tokai Tokyo Intelligence Laboratory.

"As soon as it hit the 40,000 level, there was a sell-off to

book profits," he said.

Wall Street rallied on Thursday to record closing highs, as

chipmaker Nvidia rose closer to a $4 trillion valuation and a

surprisingly strong U.S. jobs report cheered investors, who

shrugged off dimming chances for an interest rate cut this

month.

Investors remained cautious and refrained from making active

bets on Japanese stocks at the end of the week, as they awaited

a key U.S. trade tariff deadline next week, strategists said.

Chip-related stocks led the gains on the Nikkei, with

Advantest ( ADTTF ) rising 1.38% and Tokyo Electron ( TOELF ) gaining 0.46%.

Banking shares advanced as Japanese government bond yields

tracked U.S. yields higher. Solid job gains in the U.S.

bolstered the case for the Federal Reserve to keep interest

rates on hold.

The bank sector rose 1.29%, with shares of

Mitsubishi UFJ Financial Group ( MUFG ) climbing 1.16%.

Utility sector rose 1.3% to become the top gainer

among the 33 industry sub-indexes on the Tokyo Stock Exchange.

Uniqlo-brand owner Fast Retailing ( FRCOF ) fell 0.6% to weigh

on the Nikkei the most.