(Updates with stock prices)

By Junko Fujita

TOKYO, July 30 (Reuters) - Japan's Nikkei share average rose

on Thursday as Advantest's ( ADTTF ) higher profit forecast lifted

chip-related stocks, while banks pulled down the broader Topix.

The Nikkei rose 1.28% to 62,218.41 by the midday

break, while the Topix fell 0.29% to 3,962.68.

Advantest ( ADTTF ) jumped 11.49% after raising its annual

operating profit forecast by 35% on Wednesday as AI spending

drives demand for its chip-testing equipment.

"Thanks to Advantest's ( ADTTF ) tremendous outlook, shares in other

chip-related stocks rose," said Kazuaki Shimada, chief

strategist at IwaiCosmo Securities.

Chip-making equipment maker Tokyo Electron ( TOELF ) rose

5.32%. Memory maker Kioxia ( KXHCF ) jumped 9.41%.

Shimada said global concerns over heavy spending on AI

infrastructure outpacing revenue growth eased after Microsoft ( MSFT )

signalled its massive spending bets were paying off.

Nasdaq and S&P futures were up 1% and 0.5%,

respectively, in Asian trading, signalling a potential rebound

of U.S. technology stocks later in the day, said Shimada.

Wall Street ended sharply lower overnight after the Federal

Reserve held interest rates steady, with AI-related chip stocks

adding to recent declines ahead of quarterly reports from

Microsoft ( MSFT ) and Meta Platforms ( META ). The Nasdaq 100 index

marked an 11% drop from its June record high.

In Japan, Mitsubishi UFJ Financial Group ( MUFG ) and

Sumitomo Mitsui Financial Group ( SMFG ) lost 3.18% and 2.15%,

respectively.

"This is a typical trend in recent sessions where AI-related

shares are strong, value shares such as banks are sold off,"

said Shimada.

Toyota Motor ( TM ) fell 1.71%. System integrator Nomura

Research Institute ( NURAF ) lost 6% to become the biggest

percentage loser on the Nikkei.

Of the more than 1,500 stocks trading on the Tokyo Stock

Exchange's prime market, 35% rose, 62% fell and 2% traded flat.