TOKYO, July 5 (Reuters) - Japan's Nikkei share average fell on Wednesday as investors booked profits after a recent rally and due to a decline in Fast Retailing's shares after the Uniqlo brand owner posted a drop in monthly sales.

The Nikkei index pared early losses to trade 0.36% lower at 33,303.00 by the midday break. The index fell as much as 1% earlier in the session.

The broader Topix edged down 0.08% to 2,304.59.

"Investors tried to lock in profits after a sharp rally," said Ikuo Mitsui, fund manager at Aizawa Securities.

"Recently, the Nikkei has tended to pare losses because there are still many investors who want to increase their positions in Japanese stocks and they buy shares on dips, which cuts some losses or even helps the index reverse course."

Fast Retailing fell 2.98%, the most on the Nikkei, after it reported a 3.4% decline in same-store sales for June.

Chip-making equipment maker Tokyo Electron fell 0.44% and medical equipment maker Terumo lost 1.26%.

Shipping firm Kawasaki Kisen Kaisha surged 5.61% to the top of the Nikkei. The shipping sector's 3% gain was the most among the 33 industry sub-indexes on the Tokyo Stock Exchange.

Daiichi Sankyo rose 5.31% after tanking nearly 15% in the previous session. The pharmaceutical sector rose 1.5%, with Sumitomo Pharma jumping 3.06%.

Of the Nikkei's components, 93 stocks rose and 131 declined, with one being flat. (Reporting by Junko Fujita; Editing by Savio D'Souza)