(Updates with closing prices)

TOKYO, July 1 (Reuters) - Japan's Nikkei share average

gave up most of its early gains to end little changed on Monday,

as the central bank's Tankan survey drove expectations for

interest rate hike bets.

The Nikkei inched up 0.12% to close at 39,631.06,

after rising as much as 0.9% earlier, tracking its futures

higher in the previous session.

The Nikkei average futures on the Chicago Mercantile

Exchange ended 1% higher on Friday.

"The outcome of the BOJ's tankan suggested that Japanese

companies will keep raising prices and inflation will continue,"

said Shuutarou Yasuda, a market analyst at Tokai Tokyo

Intelligence Laboratory.

"That lifted expectations that the BOJ will raise rates

again soon, and promoted inventors to sell stocks to lock in

profits."

The BOJ's closely watched "tankan" survey showed the

headline sentiment index for big manufacturers hit +13 in June,

up from +11 in March and slightly exceeding a median market

forecast for a reading of +12.

The reading, the highest since March 2022, reflected a

rebound in automobile sector output and success by manufacturers

to pass on rising raw material costs through price hikes.

The broader Topix closed up 0.52% at 2,824.28, after

hitting 2,838.67, its highest since January 1990.

"Investors sold stocks as they thought the Nikkei's level

earlier in the session was not justified," said Jun Morita,

general manager of the research department at Chibagin Asset

Management.

"But the positive news today was that the Topix hit a new

high, which means the market bought value stocks in a broad

rally."

The Topix's index for value stocks jumped 0.96%,

while the index for growth shares inched up 0.05%.

Shares of department store operators rose, with J.Front

Retailing ( JFROF ) surging 14.72% to become the top percentage

gainer on the Nikkei and Takashimaya ( TKSHF ) jumping 11.09%,

after they raised their annual profit forecast.