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

hit a record high on Tuesday, with chip-related stocks tracking

U.S. peers higher as investors awaited testimony from Federal

Reserve Chair Jerome Powell for clues for the rate path.

The Nikkei ended the midday session with a record

high, up 1.49% at 41,386.8.

"The market expects Powell's comments will indicate policy

easing, which lifted U.S. chip stocks overnight and the Japanese

chip makers tracked the trend," said Takehiko Masuzawa, trading

head of Phillip Securities Japan.

The S&P 500 and Nasdaq notched record-high closes on Monday,

with Nvidia ( NVDA ) rising 2% and Intel ( INTC ) rallying more

than 6%, lifting the Philadelphia semiconductor index

1.9%.

Powell will speak to Congress on Tuesday and Wednesday.

Traders now see a greater than 75% chance of a rate cut of

at least 25 basis points by September, up from last week's 60%,

according to CME's FedWatch.

In Japan, chip-making equipment maker Tokyo Electron ( TOELF )

jumped 3.88%, giving the biggest support to the Nikkei.

Chip-testing equipment maker Advantest ( ADTTF ) climbed 3.17%.

The U.S. rate cut expectations weighed on Japanese bank

stocks, sending the banking index 0.59% lower. The

index for value shares inched up 0.19%, while the

growth stock index jumped 1.07%.

The broader Topix was up 0.62% to 2,885.37.

Investors were cautious about the possible impact of a

sell-off in exchange-traded funds on Wednesday, a move to

distribute payouts, which market players estimated to be worth

about 750 billion yen ($4.66 billion), said Phillip Securities

Japan's Masuzawa.

($1 = 160.9800 yen)

(Reporting by Junko Fujita; Editing by Mrigank Dhaniwala)