Japan's Nikkei jumps as chip stocks rally ahead of Sino-US talks

TOKYO, June 9 (Reuters) - Japan's Nikkei share average advanced 1% on Monday ahead of trade talks between the U.S. and China in London later in the day, with investors watching for any easing of restrictions over semiconductor shipments.

Both countries are under pressure to relieve tensions, with China dominating global exports of rare earth minerals needed for chips and other advanced technologies, while the U.S. has curtailed exports of chip-design software to China.

A phone call between U.S. President Donald Trump and Chinese counterpart Xi Jinping on Thursday led to the Monday talks, with Trump later saying rare earth supply would no longer be a problem for the United States.

The Nikkei .N225 rose 1.05% to 38,137.09 as of the midday trading recess.

The broader Topix .TOPX rose 0.63%. A sub-index of growth shares .TOPXG rallied 0.8%, outpacing a 0.47% rise in value shares .TOPXV.

Chip-testing equipment maker and Nvidia supplier Advantest 6857.T was Nikkei's biggest gainer in index-point terms with a 5.17% climb.

"The trade talks in London are at the very least a step in the direction of easing restrictions on chip shipments between the U.S. and China," buoying the sector on Monday, said Yunosuke Ikeda, chief macro strategist at Nomura.

Artificial intelligence-focused startup investor SoftBank Group 9984.T jumped 4.03%. Chip-sector stocks Disco 6146.T and Lasertec 6920.T rose about 3% each.

Otsuka Holdings 4578.T, the Nikkei's biggest percentage gainer, soared 8.65% after the drugmaker said its experimental therapy for a potentially life-threatening kidney disease more than halved severe levels of protein in the urine of patients.

On the other end, iSpace 9348.T was poised to fall by the daily limit for the second straight session after its second failed attempt to put a lunar lander on the moon last week.

The stock was set to slide 20%, with offers to sell outnumbering bids by 9-to-1.