TOKYO, June 11 (Reuters) - Japan's Nikkei share average closed at a two-month peak on Tuesday as heavyweight chip shares tracked their Wall Street peers higher, while investors braced for the Federal Reserve's policy decision later this week.

Sentiment was up during early Tokyo trading after the S&P 500 and Nasdaq both logged record closing highs overnight.

Japan's chip-related shares in particular performed strongly, following gains on the Philadelphia SE Semiconductor Index to lift the overall index.

The Nikkei finished up 0.25% at 39,134.79, its highest closing level since April 15. The index eased from a three-week intraday high of 39,336.66 touched in early trade as caution took hold.

The broader Topix fell 0.2% to 2,776.80.

Investors were positioning carefully ahead of the U.S. CPI report for May, due Wednesday, along with the conclusion of the Fed's two-day policy meeting.

The U.S. central bank is widely expected to hold interest rates but will release updated economic and policy projections, putting the focus on clues of how soon policymakers expect to begin policy easing.

But markets continue to take comfort that the Fed's next move will be a cut and not another hike, said Charu Chanana, global market strategist and head of FX strategy at Saxo.

"That is helping U.S. and Japanese stocks, along with sustained AI momentum."

Among individual stocks, chip-related shares Tokyo Electron and Advantest climbed 2.2% and 1.6%, respectively.

Daiwa Securities Group slipped 4.6% to become the biggest percentage loser. The firm announced the purchase of additional Aozora Bank shares on Tuesday. Aozora Bank gained 1.1%.

Shares of pharmaceutical firm Eisai declined 3.3%, after a vote by outside advisers to the U.S. Food and Drug Administration on Monday cleared the way for a final decision on Eli Lilly's experimental Alzheimer's treatment. Eisai has developed its own treatment, Leqembi, with Biogen.

(Reporting by Brigid Riley; Editing by Sonia Cheema and Eileen Soreng)