Japan's Nikkei tracks Wall Street lower amid inflation worries

TOKYO, Jan 8 (Reuters) - Japan's Nikkei share average fell on Wednesday, tracking overnight Wall Street declines after a batch of upbeat U.S. economic data raised concerns that sticky inflation could slow the Federal Reserve's pace of monetary easing.

The Nikkei index .N225 declined 0.6% to 39,843.84, as of 0153 GMT, with 163 of its 225 components falling, 60 rising and two trading flat.

The broader Topix index .TOPX slid 0.75%, with growth shares .TOPXG dropping 0.92%, compared with a 0.57% slide for value shares .TOPXV

The U.S. S&P 500 .SPX sank 1.1% on Tuesday, after a report showed services sector activity accelerated in December, with a measure tracking input prices surging to a nearly two-year high.

Interest rate-sensitive tech shares slid, with the tech-heavy Nasdaq index .IXIC dropping 1.9%.

Chip shares initially fell in Tokyo, but many rebounded over the course of the morning, with Nomura strategist Kazuo Kamitani pointing to Nvidia's presentation at CES overnight for generating new buzz for the sector.

"In the end, expectations for AI, chips and everything of that sort continue to be high," he said.

He also flagged the psychological line at 39,500 as a support for the Nikkei.

Nvidia-supplier Advantest 6857.T rose 1.5% and chip-making equipment giant Tokyo Electron 8035.T gained 1.7%, after both shares began the day lower.

Carmakers were overall supported by a weaker yen, which continued to hover near 6-month lows. A weak local currency boosts the value of overseas revenues.

Toyota 7203.T gained 0.8%, while Subaru 7270.T and Mazda 7261.T, which are highly dependent on U.S. sales, climbed 1.1% and 0.7%, respectively.

Uniqlo store operator Fast Retailing 9983.T slumped 1.3%, ahead of its earnings presentation on Thursday.

(Reporting by Kevin Buckland; Editing by Rashmi Aich)

((Kevin.Buckland@thomsonreuters.com;))