* Machinery stocks fall on profit-taking triggered by Sino-U.S. trade disputes
* Topix hits highest since February
By Ayai Tomisawa
TOKYO, Sept 25 (Reuters) - Japan's Nikkei rose for a seventh session on Tuesday helped by gains in chip-related stocks that offset weakness in construction equipment manufacturers, which fell on worries that a new round of U.S.-China trade tariffs could hurt global demand.
Investors returned to the market after a national holiday on Monday. The dollar's ascent above 112 yen level has underpinned overall sentiment.
Tuesday's gainers included large-cap stocks such as Tokyo Electron and Advantest Corp, which soared 2.4 percent and 3.5 percent, respectively, tracking steady U.S. tech shares overnight.
The Nikkei share average gained 0.3 percent to 23,940.26, rising for the seventh straight session. The benchmark index hit its highest in more than eight months after rising U.S. yields pushed up financial stocks while the weak yen supported overall sentiment.
The next milestone is the 24,129.34 level hit on Jan. 23, a break of which would put the index at its highest since November 1991.
The broader Topix gained 1.0 percent to 1,822.44, the highest level since early February.
Advancing issues outnumbered decliners by 1,777 to 291.
Market analysts said that investors are monitoring the outcome of trade talks between Japan and the United States this week.
The two countries postponed their second round of trade talks in New York to Tuesday from Monday, a Japanese official said, amid concerns in Tokyo that Japan would face greater pressure to reduce the bilateral trade imbalance.
U.S. Trade Representative Robert Lighthizer and Economy Minister Toshimitsu Motegi had been scheduled to meet on Monday evening, ahead of a Wednesday summit between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe, on the sidelines of a U.N. General Assembly meeting.
"It looks like Abe and Trump had peaceful talks overnight, so the market is not worried too much that the talks could go wrong," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
But he added that investors stay careful as China-U.S. tensions are stoking growth fears.
Keeping broader sentiment cautious, China and the United States imposed a new round of tariffs on each other's goods on Monday, which is expected to undermine global growth.
Construction equipment makers Komatsu Ltd shed 1.3 percent and Hitachi Construction Machinery declined 2.6 percent, as investors took profits from 13 percent gains in their shares over the past week.
Electrical equipment maker Yaskawa Electric tumbled 6.3 percent after jumping 13 percent last week.
Editing by Sam Holmes and Eric Meijer