(Updates with closing prices)

TOKYO, May 8 (Reuters) - Japan's Nikkei share average

rose on Thursday as chip-related shares tracked a rally in U.S.

semiconductor stocks, while NTT Data ( NTTDF ) surged following a takeover

report.

The Nikkei ended 0.41% higher at 36,928.63 after

breaking a seven-day winning run on Wednesday.

The broader Topix reversed course to end 0.09%

higher at 2,698.72, posting a nine-session rising streak.

"The two main indexes have recouped their losses quickly

(since U.S. President Donald Trump's tariff announcement last

month), but the speed of the recovery has slowed down," said

Seiichi Suzuki, chief equity market analyst at Tokai Tokyo

Intelligence Laboratory.

"Investors have become cautious as the Nikkei approached the

psychological level of 37,000."

Overnight, U.S. stocks rallied close to the closing bell as

chipmakers jumped after Bloomberg reported Trump's

administration plans to rescind artificial intelligence chip

curbs.

A U.S. Commerce Department spokesperson subsequently

confirmed the report. The PHLX semiconductor index ended

1.7% higher after falling as much as 1% earlier in the session.

Japan's chip-testing equipment maker Advantest ( ADTTF )

jumped 3.73% and chip-making equipment maker Tokyo Electron ( TOELF )

gained 2.05%.

NTT Data ( NTTDF ) surged 16.73% to a daily limit high after

the Nikkei newspaper reported telecom giant NTT plans

to buy the shares it does not already own through a public

tender offer.

After the market closed, NTT

announced

it would launch a tender offer for NTT Data ( NTTDF ) at 4,000 yen

per share, representing a 34% premium from Wednesday's closing

price.

Drug maker Torii Pharmaceutical ( TRXPF ) surged 13.62%

after peer Shionogi ( SGIOF ) said it would acquire Torii, a

subsidiary of Japan Tobacco ( JAPAF ), for more than 150 billion

yen.

Toy maker Bandai Namco Holdings ( NCBDF ) fell 8.19%,

becoming the biggest percentage loser on the Nikkei.

Of more than 1,600 stocks trading on the Tokyo Stock

Exchange's prime market, 54% rose and 42% fell, with 4% flat.

($1 = 143.6600 yen)