(Updates with closing prices)

By Kevin Buckland

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

touched its highest in almost five months on Thursday, as a

period of calm in the Middle East encouraged investors to buy

back riskier assets, particularly chip and other high-tech

shares.

The Nikkei climbed 1.7% to 39,584.58 at the close

and reached 39,615.59 at its highest point during the session, a

level last seen on January 31.

Artificial intelligence-linked stocks stood out, with

startup investor SoftBank Group climbing 5.5% and

chip-testing equipment maker Advantest ( ADTTF ) advancing 5.0%.

By contrast, the broader and less tech-heavy Topix

rose 0.8%. A sub-index of growth shares gained 0.9%,

outpacing a 0.8% increase in value shares.

Markets globally have been soothed by the ceasefire between

Israel and Iran this week, which reduced the risk of disruptions

to global oil supply. Japan imports virtually all of its crude,

and energy-intensive manufacturing is a key national industry.

"Growth shares, particularly semiconductor-related stocks,

are benefitting from the improvement in risk sentiment," said

Maki Sawada, a strategist at Nomura Securities.

The AI boom narrative is still intact, she said, adding that

investors are rotating into tech from defensive sectors.

Food and pharmaceuticals were

among the few Topix industry groups to decline on the day,

although losses were mild.

The Nikkei's worst-performing stock, however, was chipmaker

Renesas, which tumbled 12% on signs it would push back

long-term targets by five years to 2035 at an investor

presentation later in the day.

The best performer was industrial machinery maker Ebara ( EBCOF )

, which soared close to 10% after Tokai Tokyo

Intelligence Laboratory reiterated its outperform rating on the

stock.