TOKYO, Nov 16 (Reuters) - Japan's Nikkei share average snapped a three-day winning streak on Thursday as investors chose to lock in profits after a sharp rally in the previous session, with a rebound in U.S. Treasury yields also weighing on sentiment.

The Nikkei index closed 0.28% lower at 33,424.41, reversing gains of 0.28% notched up earlier in the session. It jumped 2.5% on Wednesday, topping the 33,000 level for the first time in nearly two months. For the month, it has risen 8.3%.

"Investors bought stocks at one point, betting that the Nikkei would continue its momentum and cross its highest closing level scaled this year in July," said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Research Institute.

"But that buying did not last long, with rises in U.S. Treasury yields overnight weighing on sentiment."

U.S. Treasury yields rebounded from two-month lows overnight despite signs of slowing inflation, after a revision of retail sales data showed strong gains in September.

Yields on Japanese government bonds were mixed, with those on longer-dated notes inching higher after hitting their lowest in nearly a month in the previous session.

"Investors wanted to wait and see the direction of markets as U.S. and Japanese markets seemed to have overheated this month, with sharp gains in stocks and declines in government bond yields," said Ikuo Mitsui, a fund manager at Aizawa Securities.

The broader Topix inched down 0.19% to 2,368.62.

Chip-related stocks fell, with Advantest slipping 1.81% to become the biggest drag on the Nikkei and Tokyo Electron losing 0.1%.

Heavyweight Recruit Holdings, parent of job-search site Indeed, surged 9.39% after ValueAct Capital Management bought a stake in the company. (Reporting by Junko Fujita; Editing by Janane Venkatraman and Subhranshu Sahu)