TOKYO, April 20 (Reuters) - Japan's Nikkei share average

rose on Monday, nearing the all-time high it scaled last week,

as optimism over the red-hot artificial intelligence (AI) sector

overwhelmed concerns about the Middle East crisis.

The benchmark Nikkei 225 Index rose 0.97% to

59,045.45 by the midday trading break, closing in on its record

intraday level of 59,688.10 touched on Thursday. The broader

Topix climbed 0.67% to 3,786.07.

The benchmark S&P 500 and the tech-heavy Nasdaq both climbed

to their third record close in a row on Friday after Iran said

it would open the Strait of Hormuz shipping lane for oil.

But hopes for a lasting ceasefire faded over the weekend

after the United States said it had seized an Iranian ship that

tried to run its blockade and Iran vowed to retaliate.

"The trend of major U.S. indices hitting record highs across

the board, along with expectations for the AI sector and

corporate earnings, are providing support for Japanese stocks,"

Takayuki Miyajima, senior economist at Sony Financial Group,

said in a note.

"Amid a market environment prone to swinging between

optimism and pessimism in response to reports on the situation

in Iran, the market is likely to see a tug-of-war."

There were 138 advancers on the Nikkei index against 86

decliners. SoftBank Group, a major investor in AI, and

chip-sector supplier Lasertec ( LSRCF ), were among the sharpest

gainers on the gauge, rising 5% and 5.6%, respectively.

The largest losers on the Nikkei were Sumitomo Pharma ( DNPUF )

, down 5.7%, followed by Tokyo Gas ( TKGSF ), 3.8% lower,

and retailer Ryohin Keikaku ( RYKKF ), which sank 3.3%.