TOKYO: Japan’s Nikkei share average climbed more than 1% on Friday, lifted by chip-industry stocks, with the benchmark index headed for a second straight weekly advance.

The Nikkei was up 1.6% at 36,034.71, as of 0204 GMT, climbing 1.28% for the week. Earlier in the session, the index rose as high as 36,076.23, closing in on Wednesday’s 34-year peak at 36,239.22.

The broader Topix added nearly 1% to 2,516.50, on track for a 0.9% weekly gain.

Technical indicators continue to point to the Nikkei’s 7.7% surge so far in 2024, the best among major indexes, as ‘overheated’, even after declines in the previous two trading sessions.

One common gauge called the relative strength index, or RSI, stands at about 73, above the 70 threshold that signals an overbought market.

Foreign investors have been a major driver of this year’s rally, with finance ministry data this week showing net purchases of more than 1.2 trillion yen ($8.09 billion) of Japanese equities in the seven-day period ended Jan. 13.

“That’s a very large number for a single week,” said James Halse, portfolio manager at Platinum Asset Management in Sydney.

“Interest (in Japanese equities) has been increasing quite consistently over the last year or so, and likely (will increase) further this year with how the market has performed so far.”

Japanese chip-related shares were standout performers on Friday, tracking gains in US peers after Taiwan Semiconductor Manufacturing (TSMC), the world’s largest contract semiconductor maker, projected 2024 revenue growth of more than 20% on booming demand for high-end chips used in artificial-intelligence applications.

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Heavyweight Nikkei stocks Tokyo Electron and Advantest were the biggest points gainers, contributing more than 100 points each to the Nikkei’s total 565-point jump on the day, with respective advances of 5.05% and 7.92%.

Precision machinery was the top performer among the Tokyo Stock Exchange’s 33 industry groups, rising 2.62%.