TOKYO, Oct 27 (Reuters) - Japan's Nikkei share average recovered on Friday after suffering its worst drop in three weeks in the previous session, with chip-related stocks leading the recovery.

The Nikkei rose 1.27% to close at 30,991.69, after losing 2.14% in the previous session. The broader Topix ended 1.37% higher at 2,254.65.

For the week, however, the Nikkei lost 0.86%, while the Topix edged down 0.04%.

"Investors bought back stocks as the Nikkei approached its lowest level so far this month. The shares have fallen to a level which we consider cheap," said Ikuo Mitsui, fund manager at Aizawa Securities.

"But overall, Japanese companies are expected to boost their earnings, which has prompted investors to buy back shares. Towards the peak of the earnings season, investors will become more selective about which companies they want to buy."

Chip-testing equipment maker Advantest rose 0.93% after a 7% decline in the previous session, providing the biggest boost to the Nikkei.

Chip-making equipment maker Tokyo Electron rose 1.4% and silicon wafer maker Shin-Etsu Chemical gained 2.06%.

Fujitsu surged 11.99% to become the top performer on the Nikkei, even though the computer maker cut its full-year sales and operating profit forecasts.

Shares in Takeda Pharmaceutical fell 6.37% to weigh on the Nikkei the most, after the country's biggest drugmaker slashed its full-year profit forecast by 36%.

Canon slipped 4.7% after the camera maker cut its annual sales forecast. (Reporting by Junko Fujita; Editing by Subhranshu Sahu and Varun H K)