(Updates with closing levels)

By Rocky Swift

TOKYO, April 24 (Reuters) - Japan's Nikkei set a closing

record high on Friday, capping a third consecutive weekly gain,

as enthusiasm over technology sector earnings offset uncertainty

over a potential peace deal in the Middle East.

The benchmark Nikkei 225 Index rose 0.97% to close

at an unprecedented 59,716.18. The gauge rose 2.1% on the week.

The broader Topix eked out a 0.01% advance to end at

3,716.59.

The Nikkei briefly broke through the psychologically key

60,000 mark for the first time on Thursday, more than recouping

all its losses since the war broke out in Iran almost two months

ago and spread around the region.

Lebanon and Israel extended their ceasefire for three weeks

after a high-level meeting at the White House, U.S. President

Donald Trump said on Thursday. Trump also said the U.S. would

not use a nuclear weapon against Iran, following the extension

of a ceasefire with Tehran earlier in the week.

Overnight, chipmaker Intel ( INTC ) forecast second-quarter

revenue that beat Wall Street expectations as demand surges for

the company's server processors used for artificial intelligence

in data centres. Ibiden ( IBIDF ), a Japanese supplier to Intel ( INTC ),

soared 12.6% in Tokyo, leading gains on the Nikkei.

"Today's Japanese stock market is being driven upward by a

sense of relief regarding the situation in the Middle East,

along with continued expectations of earnings growth from the

expanding AI sector," said Wataru Akiyama, an equities

strategist at Nomura Securities.

There were 92 advancers on the Nikkei index against 131

decliners. After Ibiden ( IBIDF ), the steepest gainers were Denka ( DENKF )

, up 8.3%, and chip industry supplier Advantest ( ADTTF )

, which advanced 5.5%.

Canon was among the steepest decliners on the

Nikkei, losing 7.9%. After the bell on Thursday, the company

announced a downward revision to its earnings forecast.