(Updates with closing levels)

By Brigid Riley

TOKYO, July 11 (Reuters) - Japan's Nikkei share average

surged to an all-time high on Thursday, crossing 42,000 points

for the first time as an overnight rally in U.S. stocks boosted

investor sentiment.

The Nikkei ended 0.94% higher at 42,224.02, securing

a third consecutive record high close this week. The benchmark

index had hit a record intraday high of 42,426.77 points in

early trading.

The broader Topix finished up 0.69% at a record high

close of 2,929.17.

All three of Wall Street's main stock indexes performed

strongly on Wednesday ahead of inflation data and quarterly

earnings reports due this week, kicking off a widespread rally

in Japanese shares.

Of the Nikkei's 225 constituents, 180 shares advanced,

including index heavyweight and Uniqlo parent firm Fast

Retailing ( FRCOF ) which gained 2.3% to give the index the

biggest lift.

Semiconductor-related shares followed their U.S. peers

higher after strong quarterly revenue results from Taiwan

Semiconductor Manufacturing Co, the world's largest

contract chipmaker.

Tokyo Electron ( TOELF ) rose 0.6% and Disco Corp ( DISPF )

climbed 3.4%.

Sumco ( SUMCF ) jumped 5.9% to become the largest gainer by

percentage on the Nikkei.

AI-focused startup investor SoftBank Group was up

0.8%.

Other tech shares also marched higher, including Sony Group ( SONY )

and Fanuc ( FANUF ) which were up 3.6% and 1.4%

respectively.

Japanese equities have climbed to all-time highs over the

past two weeks, with analysts citing further yen depreciation

and more perceived certainty in the market regarding the outcome

of this year's U.S. presidential election as reasons.

Analysts expect Japanese shares to see further momentum as

companies report earnings this month.

"This earnings season, Japanese corporate earnings are

likely to be better than expected because of the degree of yen

depreciation," Kenji Abe, chief strategist at Daiwa Securities

said.

"There may be some further increases in equity prices as we

see good earnings reports from companies," potentially pushing

the Nikkei as high as 42,600 or 42,700 points, he said.

The Nikkei is up 25% for the year so far.

(Reporting by Brigid Riley; Editing by Mrigank Dhaniwala and

Varun H K)