TOKYO, May 29 (Reuters) - Japan's Nikkei share average

erased early gains to trade lower on Wednesday as investors sold

growth stocks on worries about the impact of rising Japanese

government bond (JGB) yields.

The Nikkei was down 0.17% at 38,789.52 by the midday

break after rising as much as 0.7% to track the strong

performance of U.S. chip-related stocks driven by Nvidia's ( NVDA ) rise.

The broader Topix fell 0.27% to 2,761.05.

"The market became nervous about rising JGB yields, which is

a headwind for heavyweight growth stocks," Shoichi Arisawa,

general manager of the investment research department at

IwaiCosmo Securities said.

"The gains in domestic stocks were eliminated by the rising

JGB yields."

Higher yields could hurt growth stocks whose appeal lies in

future cash flows.

The Topix's growth stock index lost 0.49%, while

the value shares index inched down 0.07%.

Japan's 10-year bond yield hit a more than

12-year high of 1.065% earlier in the session amid growing bets

that policy tightening by the Bank of Japan is imminent.

Chip-making equipment maker Tokyo Electron ( TOELF ) reversed

course to slip 0.11%. Air-conditioning maker Daikin Industries ( DKILF )

fell 2.17%. Uniqlo-brand owner Fast Retailing ( FRCOF )

lost 0.88%.

Mitsubishi Electric ( MIELF ) fell 6.33% as the home

appliances maker lowered the target for its return on equity to

9% from 10%.

Chip-testing equipment maker Advantest ( ADTTF ) rose 2.35%

and SoftBank Group gained 3.21%, supported by an

overnight 7% gain in shares in Nvidia ( NVDA ). An index of U.S.

semiconductors rose 1.9%.

The shipping industry fell 1.5% to become the

worst performer among the Tokyo Stock Exchange's 33 industry

sub-indexes.

The insurance sector was the top performer,

rising 2.36%, with Sompo Holdings ( NHOLF ) jumping 5.45% to

become the top percentage gainer on the Nikkei. Peer T&D

Holdings rose 3.85%.

(Reporting by Junko Fujita; Editing by Mrigank Dhaniwala)