(Updates with closing levels; adds new comments in paragraph 8)

By Brigid Riley

TOKYO, June 19 (Reuters) - Japan's Nikkei share average

ended higher on Wednesday, tracking an overnight Wall Street

rally in semiconductor stocks, although profit-booking limited

gains.

Japan's technology shares had rallied in the morning,

following gains in U.S. chip star Nvidia ( NVDA ), which

overtook Microsoft ( MSFT ) to become the world's most valuable

company overnight. The Philadelphia Semiconductor index

also climbed more than 1%.

The Nikkei closed 0.23% higher at 38,570.76, while

the broader Topix finished up 0.47% at 2728.64.

"There were some concerns last week about political risk in

Europe and the Nikkei also declined. But since the beginning of

this week, U.S. and European shares have steadied, and Nvidia ( NVDA )

performed strongly," said Masahiro Ichikawa, chief market

strategist at Sumitomo Mitsui DS Asset Management.

The combination has improved sentiment, he said.

But profit-taking limited the Nikkei's gains in the

afternoon, with the U.S. markets being closed on Wednesday for a

public holiday, sending the index at times into negative

territory.

While sentiment was lighter after some of the uncertainty

weighing on the market last week was dispelled, there weren't

enough drivers to push the index higher, said Maki Sawada, an

equities strategist at Nomura Securities.

"It was an easy environment for position adjusting to set

in."

Mitsubishi Motors ( MMTOF ) jumped about 9% to become the top

gainer on the Nikkei. The auto firm's president indicated in an

interview with the Nikkei newspaper that the company might buy

back shares for the first time in 18 years and increase

shareholder returns in fiscal year 2025.

Fellow auto manufacturer Mazda Motor ( MZDAF ) rose 3.6%.

Chip-testing equipment maker Advantest ( ADTTF ), which

counts Nvidia ( NVDA ) among its customers, climbed 4.1% to become the

second-biggest gainer, adding 57.5 points to the Nikkei's near

89-point gain.

AI-focused startup investor SoftBank Group gained

1%.

Cosmetic company Shiseido ( SSDOF ) slid 4.8%.