Japan's Nikkei 225 rose sharply on Friday, putting the index on course for its best week in five months as semiconductor stocks rebounded from Thursday's sell-off.

The Nikkei climbed about 1.5 percent to above 61,700, closing the morning session at 61,816.72, up 997.36 yen from the previous day. The index was up more than 7 percent for the week, its strongest weekly performance since June, with gains in four of the past five sessions.

The rebound was driven by upbeat earnings and renewed optimism around artificial intelligence, even as turmoil around chipmaker Nvidia continued to unsettle global technology stocks.

Chip stocks lead the rebound

Buying spread across a wide range of sectors, led by semiconductor-related stocks that had fallen the previous day, and the gain briefly exceeded 1,000 points during the morning session.

Advantest alone lifted the Nikkei by roughly 300 yen. Fast Retailing, the operator of Uniqlo, and Recruit Holdings also traded firmly, and about 60 percent of stocks on the Prime Market advanced.

The broader Topix index ended the morning session at 3,967.54, up 30.21 points, as gains spread beyond technology into financial and other sectors.

SoftBank Group was the notable exception among the market heavyweights, declining more than 3 percent and holding back some of the index's advance.

Nvidia turmoil hangs over the rally

Friday's gains came a day after the Nikkei fell on Thursday, when uncertainty around Nvidia's leadership weighed on Asian chip stocks. Investors on Friday appeared to reassess the broader impact of the shake-up, looking past the turmoil at the world's most valuable chipmaker.

Nvidia shares fell about 3 percent in extended US trading after Jensen Huang resigned as chief executive. The resignation has kept enthusiasm for AI stocks in check across the region, even as Japanese chip names recovered.

The US dollar traded in the higher 159 yen range on Friday, a level that tends to support Japanese exporters by lifting the value of their overseas earnings.

Regional markets split

Elsewhere in Asia, markets were mixed. Hong Kong's Hang Seng fell close to 0.9 percent to around 23,800, with concerns over Nvidia's leadership turmoil and its potential fallout for China's technology sector weighing on sentiment. The Shanghai Composite edged up about 0.2 percent.

Investors were also looking ahead to US producer price data due later on Friday, after hotter-than-expected consumer inflation earlier in the week pushed up bets on further Federal Reserve rate increases.

For Japan, the week has marked a strong recovery from the sharp drop of the previous week. If Friday's gains hold, the Nikkei will close out its best week since June, despite the Nvidia shock that dominated headlines for much of it.