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Japanese stocks hit 4-month high as trade detente hopes lift cyclicals

* Nikkei, Topix hit highest levels since early May

* Chip-related sector lead gains on U.S.-China trade hopes

* Reversal in value shares dissipates

TOKYO, Sept 12 (Reuters) - Japanese shares posted solid gains on Thursday, with both the Nikkei and the broader Topix indexes hitting four-month highs, as signs of an easing in U.S.-China trade frictions lifted cyclical stocks such as machine makers.

The Nikkei share average rose 0.75% to 21,759.61, while the broader Topix advanced 0.72% to 1,595.10, both reaching their highest since early May.

It was the eighth straight day of gains for the Nikkei, during which it has risen 5.5 percent. In another positive sign, in dollar terms, the Nikkei raced to its highest levels since October.

U.S. President Donald Trump said on Wednesday Washington has agreed to delay increasing tariffs on $250 billion worth of Chinese imports by two weeks after Beijing said it would exempt 16 types of U.S. products from import tariffs.

“Hopes for U.S.-China deals are driving the markets now. I expect this to continue for the next few weeks,” said Soichiro Monji, senior economist at Sumitomo Mitsui DS Asset Management.

“But once any deal is done, the rally will lose momentum as the market will focus on the strength of the economy and by that time, it is possible that there will be more signs of slowdown. So now is the time to buy. If you wait, it will be too late,” he said.

Cyclical shares such as manufactures of semiconductor and robotics, which are seen as closely dependent on demand in China, rose sharply.

Fanuc Corp rallied 2.2% and Keyence Corp gained 1.9%. Advantest jumped 4.1% and Tokyo Electron climbed 2.7% to a 15-month high.

The reversal of value-oriented stocks, such as banks and automakers that had dominated the market until Wednesday, ran out of steam. Growth stocks led gains with a rise of 0.8%, versus a 0.6% increase in value stocks.

Banking stocks fell 0.3% after rising more than 10% in the previous five sessions. Transport equipment shares , which had gained more than 8% in the last five sessions, were up 0.3%.

Online fashion retailer Zozo Inc jumped 13.4%, having catapulted as much as 18.9% at one point, after Yahoo Japan Corp said it aimed to buy 50.1% of its stake. Yahoo Japan Corp rose 2.4%.

Elsewhere, Dai Nippon Printing Co Ltd advanced 9.3% after the company announced share buyback of up to 60 billion yen, or 9.94% of its outstanding shares.

The turnover of the main board hit 2.77 trillion yen ($25.65 billion), the highest since Aug. 2. ($1 = 108.0100 yen) (Editing by Subhranshu Sahu & Shri Navaratnam)