(Updates with prices as of the midday trading recess)

By Rocky Swift and Kevin Buckland

TOKYO, Sept 9 (Reuters) - Japan's Nikkei share average

climbed past the key 44,000 mark for the first time on Tuesday,

as optimism over trade and potential increases in stimulus

spending uplifted sentiment.

The Nikkei 225 Index surged as much as 1.24% to an

unprecedented 44,185.73 in early trading, before paring gains to

enter the midday trading recess up 0.2% at 43,732.80 as the

steepness of the rally spurred some profit-taking.

The broader Topix was up 0.06% at the break, after

earlier climbing 0.77%.

U.S. tariffs on Japanese autos are set to be lowered by

September 16, Japan's chief tariff negotiator Ryosei Akazawa

said in an X post on Tuesday, clearing up ambiguity over a trade

deal in July.

Shares continued strong gains from Monday following a

resignation announcement from fiscal hawk Prime Minister Shigeru

Ishiba. Sanae Takaichi, a proponent of government stimulus and

monetary easing, has decided to run in the Liberal Democratic

Party's leadership race, Kyodo news agency reported late on

Monday, citing sources familiar with the matter.

"The key point is that unless the ruling coalition can

quickly call a general election and regain its Lower House

majority, it would continue to operate as a minority government

in both houses, whoever wins the LDP leadership election," BofA

Securities analysts said.

"We think the government is likely to adopt a more

expansionary stance in the fiscal debates from the autumn, given

the need to secure the cooperation of one or more opposition

parties, all of which are calling for procyclical fiscal

policy."

Semiconductor-related shares rallied, tracking gains for

U.S. peers led by Broadcom ( AVGO ), supported by the

chipmaker's statement last Thursday that it expects sharp

artificial intelligence-related revenue growth.

The Nikkei's biggest gainer by far was chip-testing

equipment maker and Nvidia supplier Advantest ( ADTTF ), which

rallied more than 7%.

Other notable risers included chip-making tool manufacturers

Screen Holdings ( DINRF ), which jumped 3.74%, and Tokyo Electron ( TOELF )

, which added nearly 2%.

Sony ( SONY ) advanced around 2%.