News on Tuesday that South Korea's Samsung Group, the parent of the world's biggest memory-chip maker, would spend $45 billion over the next five years on research and development aided the technology sector.
The Nikkei rose 35.47 points to 14,072.20, a hair's breadth below the four-year closing high of 14,075.96 marked on November 4.
It briefly touched 14,136.16, topping 14,100 for the first time since May 23, 2001. The broader TOPIX index fell 0.66 percent to 1,487.71.
"Having done enough with banks and steel makers, investors are moving away from them," said Takahiko Murai, general manager of equities at Nozomi Securities.
"The technology sector was left out from the recent rally, so investors, in particular individual investors, have been ready for any catalyst to buy the sector," he said.
Advantest, the world's No 1 maker of chip-testing devices, rose 5.6 percent to 9,020 yen. Electronics parts maker TDK Corp shot up 6.4 percent to 9,190 yen a day after Merrill Lynch raised its target share price to 10,000 yen from 9,500 yen.
Consumer electronics maker Sony Corp rose 1.5 percent to 4,010 yen. J.P. Morgan lifted its rating on Sony to "neutral" from "underweight" on Tuesday, citing the company's better-than-expected earnings results.
Fujitsu Ltd, Japan's third-largest electronics conglomerate, gained 3.8 percent to 854 yen, adding to a 5.6 percent gain the previous day after Goldman Sachs said Fujitsu is among firms to benefit from increasing corporate capital investments, especially by companies sensitive to domestic demand.
Lender Mizuho Financial Group Inc fell 4.4 percent to 839,000 yen after Goldman Sachs cut its rating on the stock, helping to send the banking sector subindex IBNKS.2.95 percent lower.
Steel makers, which on Tuesday rose in heavy trade and helped the Tokyo bourse see the busiest day ever on its first section, reversed course.
Sumitomo Metal Industries Ltd, the most active issue by value and volume, fell 7 percent to 428 yen, extending morning losses after it disappointed some investors by not raising its dividend forecast.
Japan's third-biggest steel maker on Wednesday raised its annual profit forecast by 38 percent on strong demand and a one-off gain while its first-half profit more than doubled.
Second-ranked JFE Holdings Inc fell 4 percent to 3,890 yen. It had risen 10.7 percent in the previous two sessions following a surprise announcement on Monday, when it issued half-year earnings results, that it would more than double its dividend payment for the current business year to 100 yen per share from 45 yen for a 2.7 percent yield.
A total 3.92 billion shares changed hands on the first section, far smaller than a daily record 4.56 billion shares marked on Tuesday.
Decliners outnumbered gainers 1,014 to 568.