(Updates with closing prices)

By Kevin Buckland

TOKYO, May 22 (Reuters) - Japan's Nikkei share average

soared to a record-high close on Friday as AI shares rallied on

the back of gains for US peers.

The Nikkei ended the day up 2.7% at 63,339.07,

despite failing to breach the all-time intraday peak of

63,799.32 from May 14.

The broader Topix added 1% to 3,892.46.

A closely watched US chip share gauge, the Philadelphia SE

Semiconductor Index, advanced 1.3% overnight.

Japanese equities have stormed back from multi-week lows hit

on Wednesday, buoyed in large part by signs the Iran war may be

reaching a conclusion, which have also helped lower oil prices

and global bond yields.

"While the correction in Japanese equities - particularly AI

stocks - could linger, we do not expect it to become prolonged

or severe," BofA Securities strategists Masashi Akutsu and

Tetsuhiro Takuyama wrote in a report.

"From a medium-term perspective, we maintain a preference

for AI-related names and a bullish stance on Japanese equities."

On Friday, AI-focused investor SoftBank Group was

by far the biggest support for the Nikkei, contributing 578 of

the index's total 1,655-point gain with an 11.9% surge.

Chip-equipment heavyweight Tokyo Electron ( TOELF ) was another

strong contributor, reversing initial losses to finish with a

2.1% advance.

Notably, though, the split among Nikkei constituents was

much more balanced, with 120 rising, 100 falling and five ending

flat.

In the broader market, 16 of the Tokyo Stock Exchange's 33

industry groups gained, led by a 6.8% jump for nonferrous metals

- a category that included data centre cable makers

Furukawa Electric ( FUWAF ) and Fujikura ( FKURF ), which rose

8.9% and 7.8%, respectively.