TOKYO, Oct 20 (Reuters) - Japan's Nikkei surged 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 1.7% to

48,369.45 in early trading. The broader Topix rose 1.4%.

The Nikkei hit an all-time high 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 support for 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.

The largest gainers in the Nikkei were Lasertec ( LSRCF ), up

3.4%, followed by IHI, which added 3.4%, and Tokyo

Electron ( TOELF ), which gained 3.4%.

There were 175 advancers on the Nikkei index versus only one

decliner.

(Editing by Subhranshu Sahu)