TOKYO, June 26 (Reuters) - Japan's Nikkei share average

climbed over 1% to a more-than-two-month peak on Wednesday, as a

rebound in U.S. AI chip star Nvidia ( NVDA ) overnight sent investors

snapping up technology-related stocks.

The Nikkei was up 1.41% at 39,726.39 by the midday

break, its highest since April 12, while the broader Topix

rose 0.64% to 2,805.13.

Japan's technology-related shares rallied after a lull

earlier this week, following a strong performance by AI chip

firm Nvidia ( NVDA ) and other U.S. tech megacaps overnight.

The broader chip sector outperformed, with the Philadelphia

Semiconductor index adding 1.8%. The Nasdaq rallied

1.3%.

"The rise in U.S. tech stocks has generated a pretty strong

tailwind" for Japanese equities, becoming the driving force of

the day, said Masahiro Ichikawa, chief market strategist at

Sumitomo Mitsui DS Asset Management.

Advantest ( ADTTF ), which counts Nvidia ( NVDA ) among its customers,

surged during the morning session to end up 6.6%.

Chip-making equipment giant Tokyo Electron ( TOELF ) gained

3.2%. Together, the two shares lifted the Nikkei by about 209

points.

Electronic machinery makers added 1.5% to lead

sector gains among the Tokyo Stock Exchange's 33 industry

subindexes.

Market participants may also be re-investing increased

dividend payouts into the market after a batch of payments this

week, giving some degree of extra support to shares, said

Sumitomo Mitsui DS Asset Management's Ichikawa.

Dividends have improved as Japan pushes for corporate

governance reform. Those reforms have been one of the big

supports that helped the Nikkei reach an all-time peak of

41,087.75 on March 22.

After retreating in April, however, the index has struggled

to maintain the 39,000 level over recent months amid tepid

company revenue outlooks and concerns about currency and bond

market volatility. Investors are also waiting for further

clarity on the Bank of Japan's monetary policy path.

Among other heavyweight stocks, Fast Retailing ( FRCOF ) rose

1.5%, AI-focused startup investor SoftBank Group gained

1.4%, and electrical components maker TDK was up 3.1%.