(Updates with record levels, adds movers in paragraphs 6-8)

By Rocky Swift

TOKYO, Oct 20 (Reuters) - Japan's Nikkei share gauge

surged to a record high on Monday after political negotiations

appeared to put fiscal expansionist Sanae Takaichi on a clearer

path to becoming the country's next prime minister.

The blue-chip Nikkei 225 Index jumped as much as

2.6% to 48,805.03, an all-time intraday high. The broader Topix

rose 1.9%.

The Nikkei hit record highs earlier this month after

Takaichi won a run-off to lead the ruling Liberal Democratic

Party. But a Diet vote to install her as premier was delayed

after she failed to heal a rift with a long-time coalition

partner.

After negotiations last week, the LDP and the Japan

Innovation Party, known as Ishin, have broadly agreed to form a

coalition, the Kyodo news agency reported on Sunday, with Ishin

lawmakers pledging to support Takaichi as prime minister in

parliament on Tuesday.

"The rest of the opposition appears unlikely to unite around

an alternative candidate, clearing Takaichi's path to the prime

ministership," Taylor Nugent, senior economist at National

Australia Bank, said in a note.

There were 221 advancers on the Nikkei index against four

decliners. The top two gainers on the gauge were industrial

robot makers Yaskawa Electric ( YASKF ), up 7.3%, followed by

Fanuc ( FANUF ), which soared 5.7%.

Companies involved in chips and artificial intelligence,

sectors favoured for investment by Takaichi, were also big

gainers, including SoftBank Group and Lasertec ( LSRCF )

, which surged 3.4% and 5.2%, respectively.

The biggest loser was Ryohin Keikaku ( RYKKF ), which slid

4.4% after Kyodo said the Muji store operator suspended its

online shop due to a cyberattack at a supplier.

(Editing by Subhranshu Sahu)