TOKYO, May 26 (Reuters) - Japan's Nikkei share average

edged down on Tuesday, retreating from a record high in the

previous session, as investors locked in profits and the rise in

oil prices weighed on sentiment.

The Nikkei fell 0.3% to 64,937.89 as of 0151 GMT.

The broader Topix inched 0.08% lower at 3,945.64.

The Nikkei 225 jumped 2.87% to close at 65,158.19 on the

previous day on AI-optimism bets. The index has gained 8.95%

over the past three sessions in its steepest three-day gain in

more than six years.

"The market has turned to the risk-on mode, but investors

sold stocks to book profits from the sharp rally," said Daisuke

Hashizume, senior strategist at Daiwa Securities.

"Optimism over a U.S.-Iran peace deal has already been

priced in, and gains in oil prices weighed on sentiment," he

said.

Iran's top negotiator and its foreign minister were in Doha

for talks with Qatar's prime minister on a potential deal with

the U.S. to end the three-month-old war, an official briefed on

the visit said on Monday, after Washington and Tehran played

down hopes for an imminent breakthrough.

In early Asian trade on Tuesday, Brent crude futures rose

nearly 2% after the U.S. military carried ​out strikes in

southern Iran in what it ​described as defensive actions,

keeping markets on edge as a deal to end the war eludes both

sides.

In Japan, chip-related heavyweights fell, with Advantest ( ADTTF )

and Tokyo Electron ( TOELF ) down 5% and 2.26%,

respectively.

Memory maker Kioxia ( KXHCF ) slipped 5.45% and fibre optic

cable maker Fujikura ( FKURF ) lost 3.7%.

Bucking the trend, SoftBank Group jumped 7.36% to

become the biggest support for the Nikkei.

Heavy machinery makers rose, with Kawasaki Heavy Industries ( KWHIF )

and IHI rising nearly 8% each.

Of all the shares traded on the Tokyo Stock Exchange's prime

market, 50% rose and 45% fell, and 3% traded flat.

(Reporting by Junko Fujita; Editing by Mrigank Dhaniwala)