TOKYO, April 28 (Reuters) - Japan's Nikkei rose on

Monday, putting it on course for a four-day winning streak, with

auto-sector stocks among the top performers after Toyota Motor ( TM )

revealed that it may invest in key parts supplier Toyota

Industries ( TYIDF ).

Sentiment was also buoyed broadly by some signs of a thaw in

the Sino-U.S. trade standoff, with President Donald Trump saying

on Friday that he had spoken with Chinese leader Xi Jinping.

Beijing has denied direct talks are underway, but has

exempted some U.S. goods from steep levies.

The Nikkei was up 0.5% at 35,887.89, as of the

midday trading recess. Earlier in the day, the index rose as

high as 36,075,26, crossing the psychological 36,000 level for

the first time since April 1.

The benchmark index hasn't posted a four-day winning streak

since January.

The broader Topix gained 1%.

Trump also said on Friday that a tariff agreement with Tokyo

is very close, without providing details. Japan's top

negotiator, economy minister Ryosei Akazawa, will be in

Washington from Wednesday for a second round of talks.

"The backdrop to everything is U.S. tariff negotiations, and

rising optimism there is supporting stock markets," said Maki

Sawada, a strategist at Nomura.

However, ahead of a national holiday on Tuesday in Japan,

and in a week packed with earnings reports that includes some of

Wall Street's Magnificent Seven tech megacaps, "investors will

be reluctant to chase the market much higher", Sawada said.

Transport equipment jumped 4.3%, making it the

standout performer among the Tokyo Stock Exchange's 33 industry

sectors.

Toyota Motor ( TM ) climbed 5.5%. Over the weekend,

Japan's biggest automaker said it was exploring the possibility

of investing in a potential buyout of Toyota Industries ( TYIDF )

.

Shares of Toyota Industries ( TYIDF ) were locked in a buying frenzy,

remaining untraded due to excess demand and poised to surge the

daily limit of 23% by market close.

Bloomberg News reported on Friday that Toyota ( TM ) Chairman Akio

Toyoda and his founding family have proposed acquiring Toyota

Industries ( TYIDF ) in a potential 6 trillion yen ($41.75 billion) deal.

One notable decliner was chip-testing equipment maker

Advantest ( ADTTF ), a Nvidia supplier, which tumbled 5.4% after

its profit forecast trailed analysts' estimates.

($1 = 143.7200 yen)