TOKYO, Sept 5 (Reuters) - Japanese stocks closed at their highest levels in a month on Tuesday, even as profit-taking emerged as the Nikkei index rose afresh above the key 33,000 mark and speculation about new share sales also weighed on sentiment.

The Nikkei 225 share average ended 0.3% up at 33,036.76, after dancing around the psychological 33,000 mark for the first time in more than a month in the session.

The broader Topix blipped 0.17% higher to 2,377.85, after renewing a 33-year high by reaching 2,379.57.

Both indexes logged seven-day winning streaks, the longest run since mid-May.

JFE Holdings led decliners on the Nikkei by a wide margin, sliding 6% after the Nikkei newspaper said the steelmaker seeks to raise as much as 120 billion yen ($818.39 million) through a public share offering and another 90 billion yen by offering five-year convertible bonds to international investors in September.

The company later announced its board had approved a 211.4 billion yen fundraising plan, including a 121.5 billion yen share offering.

The iron & steel sector was by far the worst performer among the Tokyo Stock Exchange's 33 industry groups, tumbling more than 2.5% at one stage and closing down 1.08%. It was the lead gainer on Monday with a 4.11% rally.

"I'm not surprised to see some weakness in the market today," said Kenji Abe, an equity strategist at Daiwa Securities. "Japanese stocks have performed so well, it's very natural for investors to take some profits."

Meanwhile, the JFE news "raises concerns about the supply and demand balance for Japanese equities," he said. "Now, stock prices are high, so I think more companies may consider issuing new equities."

Overall though, Abe expects the Nikkei to gradually rise towards his end-March forecast of 35,000, buoyed in the near term by upward revisions to analysts' earnings estimates following this summer's strong earnings season.

($1 = 146.6300 yen) (Reporting by Kevin Buckland; Editing by Janane Venkatraman and Eileen Soreng)