(Updates prices as of 0125 GMT)

By Kevin Buckland

TOKYO, Oct 30 (Reuters) - Japan's Nikkei share average

rose to a record high on Thursday, driven by a rally in

chip-sector shares, as investors awaited the Bank of Japan's

latest policy decision.

Japanese government bond (JGB) yields climbed, mirroring

moves in U.S. Treasuries overnight. The yen strengthened

slightly to 152.56 per U.S. dollar, stabilising after a 0.3%

drop in the previous session.

The tech-heavy Nikkei climbed as much as 0.4% to

reach 51,513.66 for the first time, before retreating to trade

0.2% down on the day at 51,198.62.

Chip-testing equipment maker Lasertec ( LSRCF ) was the

Nikkei's biggest percentage gainer, soaring 21%. Larger peer

Advantest ( ADTTF ) rose 2.4%, which was enough to make it the

top gainer in index point terms.

The broader Topix gained 0.3% to 3,288.58.

Overnight, Wall Street's Nasdaq rallied to an

all-time peak, and chipmaker Nvidia ( NVDA ) became the world's

first $5 trillion company.

"The AI data centre- and chip-related shares that have been

instrumental in driving overall gains for Japanese stocks so far

are lifting the Nikkei again today," said Nomura Securities

strategist Chisa Matsuda.

At the same time, "the fact that the Nikkei crossed the

major psychological threshold of 51,000 is significant, and

could potentially act as a weight on stocks from here," she

said.

Later in the day, the BOJ is widely seen leaving policy

unchanged, with traders focused on any signs that an interest

rate hike might be coming at the next meeting in December or the

following one in January.

The policy announcement doesn't have a set time, but

generally comes between 0330 GMT and 0500 GMT.

The two-year JGB yield rose as much as 1 basis

point (bp) to 0.95%, matching the level reached on October 1,

which was the highest since June 2008.

The five-year yield added 1.5 bps to 1.24%,

hitting that level for the third time this month. The yield had

previously not been this high since July 2008.

The 10-year yield advanced 2.5 bps to 1.675%.

(Reporting by Kevin Buckland; Editing by Rashmi Aich and

Subhranshu Sahu)