(Updates prices, adds details on Buffett investment in

paragraphs 1, 7-8)

By Junko Fujita

TOKYO, Aug 28 (Reuters) - Japan's Nikkei share average

ended higher on Thursday, supported by AI chipmaker Nvidia's ( NVDA )

strong quarterly outlook and renewed trader confidence after

billionaire investor Warren Buffett increased his investments in

the country.

The Nikkei recovered from early losses to close 0.7% higher

at 42,828.79. The broader Topix also ended up 0.7%.

Nvidia ( NVDA ) shares are a key driver of Japan's Nikkei, which is

heavily weighted toward chip-related stocks.

U.S.-based chipmaker Nvidia ( NVDA ) forecast third-quarter

revenue above market estimates on Wednesday, helped by robust

demand for its AI chips, but the stock fell 3% in after-hours

trading as its on-hold China business remained uncertain.

"The main focus is Nvidia ( NVDA ). The market is waiting to see how

the shares will perform on Wall Street later in the day," said

Takamasa Ikeda, senior portfolio manager at GCI Asset

Management.

The Nikkei index opened lower on Thursday but recouped

losses as chip-testing equipment maker and Nvidia ( NVDA ) supplier

Advantest ( ADTTF ) rebounded, closing up 1.5% after an earlier

drop of 3.6%.

The benchmark index turned higher in the afternoon after

trading house Mitsubishi Corp ( MSBHF ) said Buffett's National

Indemnity Company raised its stake to 10.23% from 9.74%. The

U.S. investor had previously raised its holdings in five major

Japanese trading houses, including Mitsubishi ( MSBHF ), in March.

Mitsubishi's ( MSBHF ) stock gained nearly 2% while rival Mitsui & Co. ( MITSF )

rose 1.2%.

Technology investor SoftBank Group rose 3.2%,

contributing the biggest boost to the Nikkei. Shares of

chip-making equipment maker Tokyo Electron ( TOELF ) ended 2%

higher.

Cable maker Fujikura ( FKURF ), a gauge for investments in

data centre sector, jumped 5.5%.

Sompo Holdings ( NHOLF ) jumped 3.3% after the Japanese

insurer said it would acquire New York-listed Aspen Insurance

Holdings ( AHL ) for about $3.5 billion.

Energy explorers rose 4% to become the top

performers among the Tokyo Stock Exchange's (TSE) 33 industry

sub-indexes.