TOKYO, June 30 (Reuters) - Japan's Nikkei share average

jumped to hit a more than 11-month high on Monday as investors'

risk appetite was boosted after a strong rally in U.S. equities,

which was driven by hopes for trade talks and Federal Reserve's

rate cuts.

The Nikkei rose 1.64% to 40,809.82 by the midday

break, hitting its highest level since July 17. The index rose

for a fifth straight session.

The broader Topix rose 0.96% to 2,867.82.

A strategist at a domestic brokerage said a rally of U.S.

equities last week and hopes of Fed rate cuts, as well as easing

tension in the Middle East helped investors to turn "risk-on".

"The Nikkei's gains are sharp and there will be some

adjustment, but that will be very limited because Japanese

stocks are still underperforming their global peers," said

Koichi Kurose, chief strategist, Resona Asset Management.

Wall Street extended its rally on Friday, sending the S&P

500 and Nasdaq to all-time closing highs as trade deal hopes

fueled investor risk appetite and economic data helped solidify

expectations for rate cuts from the U.S. Federal Reserve.

In Japan, start-up investor SoftBank Group jumped

5% to become the biggest source for the Nikkei's gains.

Chip-making equipment maker Tokyo Electron ( TOELF ) and

chip-testing equipment maker Advantest ( ADTTF ) rose 2.78% and

2.88%, respectively.

"There is an expectation that domestic spending may grow

towards the end of the year as utility costs could become lower

due to falling oil prices and a stronger yen," said Kurose.

All but two of the Tokyo Stock Exchange's 33 industry

sub-indexes rose, with the precision machinery sector

rising 2.21% to become the top percentage gainer.

Medical equipment maker Olympus jumped 6% after falling in

four straight sessions.

The automaker sector inched down 0.6% after U.S.

President Donald Trump said in an interview broadcast on Sunday

that Japan engages in "unfair" automobile trade with the U.S.