* SoftBank rises after strong Alibaba quarterly results * Sharp up on report of screen production for next iPhone * Toshiba sags on report of undershooting earnings guidance By Dominic Lau TOKYO, May 8 (Reuters) - Japan's Nikkei average hit fresh five-year highs on Wednesday after the U.S. S&P 500 set yet another record high and German industrial orders showed unexpected strength, with Sharp Corp jumping on a report of screen production for the next iPhone. The Nikkei climbed 0.9 percent to 14,307.07, its highest since June 2008, extending the previous session's 3.6 percent rally that came after an extended holiday and last week's strong U.S. jobs data. Investor sentiment was helped by a jump in German industrial orders, which confounded expectations for a drop, easing concerns over the euro zone's powerhouse, while U.S. stocks continued their strong run, with the S&P 500 hitting another record high. "The steady inflows from foreign investors are ongoing. It wasn't apparent yesterday just because people are still off for holiday. But today we are seeing more buying demand than yesterday. It is providing good support for the market," a trader at a foreign brokerage said. The benchmark Nikkei has surged 65 percent since mid-November, when Prime Minister Shinzo Abe began promising expansionary monetary and fiscal policies to revive the economy during his election campaign. The Nikkei, however, was deep in "overbought" territory, with its 14-day relative strength index at 72.8, above the 70 threshold where it is deemed to be overbought. Stocks got a further shot in the arm on April 4 when the Bank of Japan stunned markets by launching a massive monetary expansion campaign aimed at lifting the economy from its long slumber. Index heavyweight SoftBank Corp climbed 3.6 percent and was the top-weighted gainer after Chinese e-commerce company Alibaba Group, in which the Japanese firm holds a stake, reported a roughly 80 percent year-on-year increase in revenue to $1.84 billion in the last three months of 2012. Sharp was in the spotlight in morning trade, with its stock surging 6.1 percent after the Nikkan Kogyo Shimbun said the struggling consumer electronics maker would begin mass production of liquid crystal displays for the next model of Apple Inc's iPhone 5 in June. The Nikkei newspaper also said Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ had decided to set up an additional credit line totalling 150 billion yen ($1.5 billion) for Sharp. The broader Topix index gained 0.8 percent to 1,197.88. But Toshiba Corp sagged 4.1 percent after the Nikkei said Japan's leading chipmaker and supplier to Apple was likely to miss its own operating profit forecast by 23 percent for the business year that ended in March. Toshiba, which is to announce its fourth quarter results after the market close, was the most traded stock on the main board by turnover, while SoftBank and Sharp took the fourth and fifth spot respectively. Despite some earnings disappointments, investors could take comfort from improvements in the current quarter. Of the 67 Nikkei companies that have posted quarterly results so far, 55 percent of them either beat or met market expectations, according to Thomson Reuters StarMine. That compared with 62 percent misses in the previous quarter.