TOKYO (June 6): Japan's Nikkei ended flat in choppy trade on Thursday with investor sentiment hit by concerns about the U.S. trade war with Mexico and China, which shifted support toward firms with strong domestic exposure away from those reliant on oveseas trade.

The Nikkei share average ended 0.01% lower to 20,774.04, having flirted in positive territory for part of the session.

The broader Topix shed 0.3% at 1,524.91.

"Although expectations of rate cuts by the Federal Reserve have led to rallies in U.S. shares, Japanese shares are benefiting less because U.S. rate cuts would strengthen the yen," said Masahiro Ayukai, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

The Japanese yen hit a five-month high on Wednesday.

Worries about the trade wars U.S. President Donald Trump is waging on many fronts hampered semiconductor shares and other exporters.

Murata Manufacturing fell 3.9% while TDK dropped 3.4% and Taiyo Yuden plunged 4.7%.

Nissan Motor fell 1.7% and Mitsubishi Motors tumbled 5.9% after Fiat Chrysler said it had abandoned its $35 billion merger offer for Renault, the alliance partner of the two Japanese firms.

Uncertainties over the global trade environment goaded investors to seek refuge in defensive and domestic demand-oriented shares, with the wider adoption of cashless services by the government and companies offering a good theme for investors to latch on to.

Rakuten jumped 4.7% after the e-commerce company announced a tie-up with East Japan Railway on cashless services.

East Japan Railway rose 1.1% while West Japan Railway gained 1.7%.

Elsewhere, drugmaker Dai-ichi Sankyo extended its recent gains on optimism over its cancer drug, rising 1.7% and hitting a record high.

Drugstore chain operator Cocokara Fine jumped 5.7%, extending its gains so far this week to more than 30%, as it has become a target of alliance by two of its bigger rivals, Sugi Holdings and Matsumotokiyoshi.

Car park operator Park 24 jumped 4.6% in heavy trade, extending its recovery after a hit taken on the company's weaker-than-expected earnings last month.