TOKYO, July 23 (Reuters) - Japan's Nikkei share average

rebounded on Tuesday from a three-week low hit in the previous

session, as chip-sector stocks tracked an overnight rally in

their U.S. peers.

The Nikkei ended the morning session 0.2% higher at

39,676.34, poised to snap a four-day losing streak that pulled

the benchmark index as low as 39,519.39 on Monday for the first

time since July 2.

The index rose as much as 0.8% earlier in the session, but

failed to reach the psychological 40,000 mark.

The broader Topix added 0.4%.

The Nikkei's three biggest points advancers were all

chip-related stocks led by chip-testing equipment maker and

Nvidia supplier Advantest ( ADTTF ), which gained 1.82%, and

followed by chip-making machinery giant Tokyo Electron ( TOELF )

with a 0.9% rise. Shares of silicon processor Shin-Etsu Chemical ( SHECF )

were up 0.7%.

"The rebound in chip-sector stocks, inspired by the rally in

Nvidia and its peers in the U.S. overnight, is pulling up the

Nikkei," said Kazuo Kamitani, an equities strategist at Nomura

Securities.

"There's also an element of a natural rebound from the

Nikkei's recent big sell-off."

The best performer among the Tokyo Stock Exchange's 33

industry groups was shipping, which soared 6.81%, far

outpacing second-place banking's 1.56% advance.

Shippers advanced after Nippon Yusen raised its

profit forecast following the market close on Monday.

Nippon Yusen was the Nikkei's biggest percentage gainer,

rising 7.9%, followed by peer Kawasaki Kisen Kaisha ( KAKKF ),

which rallied 7.3%.