TOKYO, June 24 (Reuters) - Japanese shares advanced on Friday, with tech stocks leading the rise after sharp overnight gains on Wall Street, while sentiment was also aided by the domestic central bank's loose monetary policy.

The Nikkei share average rose 1.23% to 26,491.97, accelerating gains after U.S. futures climbed. The index posted a weekly gain of 2.04%, but has fallen 2.89% so far this month.

The broader Topix rose 0.81% to 1,866.72 and marked a 1.68% weekly gain.

Overnight, Wall Street's main indexes posted solid gains, fuelled by strong performance from defensive and tech shares that outweighed declines for economically sensitive groups as worries persisted about a potential recession.

"Recent losses in domestic equities were driven by concerns about an economic slowdown due to the Federal Reserve's tightening monetary policy but Japan's environment is different," said Shigetoshi Kamada, a general manager with Tachibana Securities' research department.

"Japan's stock market is in a favourable position. But whether this situation will continue in the long term is questionable and it will depend on the direction of U.S. interest rates."

The Bank of Japan last week maintained ultra-low rates, even though several central banks across the globe have tightened policies to tame rising inflation, which is spurring fears of a potential recession.

In Japan, chip-making equipment maker Tokyo Electron rose 3.98% and provided the biggest boost to the Nikkei. Technology investor SoftBank Group rose 2.37% and air-conditioning maker Daikin Industries climbed 3.44%.

Drug maker Shionogi & Co jumped 4.98% after announcing a share buyback.

Automakers dropped, with Mitsubishi Motors shedding nearly 8% to become the worst performer on the Nikkei. Toyota Motor and Subaru slipped 0.71% and 2.89%, respectively, after the two car makers announced recalls of their first mass-produced electric vehicles for the global market.

(Reporting by Junko Fujita, additoinal reporting by Tokyo markets team; Editing by Subhranshu Sahu)