TOKYO, May 26 (Reuters) - Japan's Nikkei share average rose 1% on Friday, powered by gains for chip stocks as U.S. peer Nvidia's strong earnings and subsequent share surge continued to the lift the sector.

The yen's drop beyond 140 per dollar overnight for the first time in half a year also buoyed the exporter-centric market.

The Nikkei was up 0.98% at 31,101.60 as of the midday break, looking to end a volatile week strong. The index surged to a post-1990 high on Tuesday at 31,352.53 before retreating sharply to as low as 30,558.14 by Thursday.

The benchmark index remains up 0.95% for the week, on course for a seventh straight weekly gains – its longest steak in five years.

The broader Topix was up 0.58% at 2,158.63, but down 0.14% for the week, leaving it poised to snap a six-week winning run. The Topix also hit a 33-year high on Tuesday, at 2,188.66.

"At these elevated levels for the Nikkei, there are people who want to buy but can't, so when there are dips in shares, they jump on those," said Maki Sawada, a strategist at Nomura Securities.

At the same time, "some technical indicators are still flashing overbought signals, so above 31,000, it's easy to think the Nikkei will invite profit taking," she added.

A popular measure known as the 14-day relative strength index (RSI) has remained above the 70 mark indicating an overheated market all week.

Chip-making equipment giant Tokyo Electron rallied as much as 6% on Friday to its highest level in almost a year.

Chip-testing machine maker Advantest - which counts Nvidia among its clients - jumped more than 5%, building on Thursday's 16% surge and renewing a record high.

Those two stocks together contributed 165 points of the Nikkei's total 300-point advance.

Looking stock by stock, the index's performance was more mixed. Of its 225 components, 112 rose while 98 fell, with 15 flat.

Energy was far and away the Nikkei's worst performing sector, dropping 1.87% after crude fell back sharply from a nearly one-month high overnight. Oil company Inpex led decliners with a 2.56% slide. (Reporting by Kevin Buckland; Editing by Shailesh Kuber)