Japan's Nikkei hits 2-month high on signs of cooling U.S. inflation

TOKYO, Nov 11 (Reuters) - Japan's Nikkei index hit a two-month high on Friday, led by Tokyo Electron and other growth stocks, tracking gains in Wall Street as signs of slowing inflation sparked speculation the U.S. central bank might become less aggressive with rate hikes.

The Nikkei rose 2.75% to 28,300.75 by the midday break, in what would be the biggest daily gain since Oct. 14. The index rose as high as 28,328.14, its strongest since Sept. 13.

The index gained 3.6% so far this week and is poised for a third straight weekly gain.

The broader Topix climbed nearly 2% to 1,973.52 and was set to gain 3% for the week.

U.S. stocks jumped overnight as cooler-than-expected inflation data suggested the Federal Reserve's barrage of interest rate hikes are beginning to have their intended effect. All three major U.S. stock indexes notched their biggest one-day percentage gains in about 2-1/2 years in a broad, robust rally.

"The fact that the growth rate of U.S. inflation was lower than expectations had boosted Wall Street, and that raised sentiment for Japanese market," said Takatoshi Itoshima, strategist at Pictet Asset Management Japan.

"Investors made a bet on Tokyo Electron, which disclosed weak outlook. This is a typical example that investors are looking for something beyond the ongoing business year."

Chip equipment maker Tokyo Electron jumped 9.09% and provided the biggest boost to the Nikkei, despite cutting its annual profit forecast. Peer Advantest climbed 9.06%.

Uniqlo brand owner Fast Retailing rose 2.25% and air-conditioner maker Daikin Industries climbed 6.02%.

Bucking the trend, Nikon tanked 8.64% to become the biggest loser in the Nikkei after the camera maker posted a lower half-year net profit. (Reporting by Junko Fujita; Editing by Sherry Jacob-Phillips)