TOKYO, July 8 (Reuters) - Japan's Nikkei share average

edged higher on Monday, with further gains capped by

profit-taking after both main stock indexes touched fresh

all-time peaks last week.

The Nikkei rose 0.21% to 40,999.80 by the midday

break, while the broader Topix was down 0.13% at

2880.32.

Market players have rushed to secure profits after the

benchmark Nikkei index rose sharply last week to hit an all-time

intra-day high of 41,100.13 on Friday, while the Topix hit a

record peak of 2,906.80.

The Nikkei retreated after reaching a new high in March as

the market adjusted due to a short-term sense of overheating,

and a similar pattern is expected this time as well, said Maki

Sawada, an equity strategist at Nomura Securities.

While trader sentiment got a boost after Wall Street stock

indexes closed firmer at the end of last week on the back of

softer-than-expected U.S. labour data, it was not enough to push

Japanese shares much higher on Monday.

Risks also lay ahead this week if market participants

interpreted the testimony from Federal Reserve Chair Powell as

dovish or U.S. inflation data showed more cooling, giving relief

to a weakened yen, said Charu Chanana, global market strategist

and head of FX strategy at Saxo.

"If more such dovish outcomes were to come through this week

... the scope of outperformance for Japanese equities could

continue to wane as the yen recovers from its record lows."

Of the Nikkei's 225 constituents, 83 shares advanced and 139

declined.

In individual shares, SoftBank Group gained 2.4% to

give the biggest lift to the Nikkei after U.S.-listed shares of

British chip designer ARM Holdings, in which the

Japanese firm has a 90% stake, surged to an all-time high.

Yaskawa Electric ( YASKF ) fell 3.6% after the electrical

equipment maker's latest revenue results disappointed.