TOKYO, March 7 (Reuters) - Japan's Nikkei share average

slipped from a record high to trade lower on Thursday, as the

yen strengthened amid growing expectations that the Bank of

Japan would end its negative rate policy this month.

The Nikkei initially rose, tracking overnight gains

of Wall Street's three major indexes, to hit a record high of

40,472.11. The index erased gains to fall 0.77% to 39,780.07 by

0213 GMT.

The broader Topix also changed course to fall 0.15%

to 2,726.56.

"Investors sold chip-related and other technology shares to

lock in profits as the yen strengthened after reports about the

BOJ's policy tweak," said Shigetoshi Kamada, general manager at

the research department at Tachibana Securities.

Momentum is building for the BOJ to consider ending negative

interest rates as soon as this month with upcoming annual wage

negotiations likely to yield bumper pay hikes for the second

year in a row.

BOJ board member Junko Nakagawa said the economy was moving

steadily towards sustainably achieving the central bank's 2%

inflation target.

Her comments followed Japan's Jiji Press's report in the

previous day that some BOJ board members were likely to say that

lifting negative interest rates is reasonable at a policy

meeting this month.

The dollar bottomed at a roughly one-month trough of 148.94

in early Asian trade on Thursday.

Chip-testing equipment maker Advantest ( ADTTF ) lost 3.49%,

becoming the biggest drag on the Nikkei, followed by chip-making

equipment maker Tokyo Electron ( TOELF ), which fell 3.03%.

Bucking the trend, financial shares rose, with Mitsubishi

UFJ Financial Group ( MUFG ) and Sumitomo Mitsui Financial Group ( SMFG )

rising 0.44% and 1.28%, respectively.

Of the 225 Nikkei components, 93 stocks rose and 130 fell,

with two trading flat.