(Updates with closing levels)

By Brigid Riley

TOKYO, July 10 (Reuters) - Japan's Nikkei share average

rose to an intraday peak in a choppy session on Wednesday as

financial shares outperformed and investors snapped up stocks to

get in on the latest rally.

After staying in negative territory for much of the

afternoon session, buying broadened toward the end of trading to

spur the Nikkei to a record high of 41,889.16 points.

The benchmark index closed up 0.61% at an all-time closing

high of 41,831.99, while the broader Topix finished

0.47% higher at a record closing peak of 2909.20.

Big-name stocks gained to give the Nikkei a lift, with

Uniqlo parent firm Fast Retailing ( FRCOF ) up 1.4% and

AI-focused startup investor SoftBank Group climbing

0.8%.

Technology and semiconductor shares, which saw a selloff in

early trading after rallying on Tuesday, narrowed their losses

or flipped into positive territory. Chip-making equipment giant

Tokyo Electron ( TOELF ) reversed morning losses to end up 1.1%.

"For now, the technicals are highly constructive with

investors buying the break-out," said Kyle Rodda, senior

financial market analyst at Capital.com.

Japan's main stock indexes have marched to all-time highs

over the last two weeks, and analysts say company earnings due

in the latter half of July could drive Japanese equities higher.

Risks remain, however, that global bond yields will move

higher amid political uncertainty, Rodda added. Higher yields

offer investors less risk while also making borrowing to fuel

growth more expensive.

Financials led gains by sectors as the Bank of Japan met

with bond market participants for a second time this week, and

data showed the country's wholesale inflation accelerated in

June, bringing policy normalisation back into focus.

Insurance firms jumped 3.5%, while securities

rose 1.3% and banks were up 1.3%.

Among individual shares, Recruit Holdings ( RCRRF ) rose 3.6%

after the staffing agency announced plans to buy back shares.

Kokusai Electric ( KOKSF ) slid 7.2% a day after Reuters

reported private equity firm KKR planned to cut its

stake in the chip equipment manufacturer.

(Reporting by Brigid Riley; Editing by Savio D'Souza and

Mrigank Dhaniwala)