TOKYO, May 21 (Reuters) - Japan's Nikkei share average rose on Monday as the dollars' rise against the yen supported some exporters after news of easing U.S.-China trade tensions, but weakness in financial stocks kept wider gains limited.
The Nikkei ended 0.3 percent higher at 23,002.37, after the dollar rose 0.5 percent to 111.245 yen, hitting a fresh four-month high in Asian trade.
The Nikkei broke the psychologically important level of 23,000 for the first time since early February. Analysts see the next resistance level at 23,122.45, an intraday low marked on Feb. 2.
However, the broader Topix edged 0.1 percent lower to 1,813.75, with only 1.29 billion shares changing hands, the lowest volume since early April.
U.S. stock futures gained after Treasury Secretary Steven Mnuchin said on Sunday that the United States and China had agreed put their tariff skirmishing "on hold" to work on a wider trade agreement.
The S&P 500 E-mini futures were up 0.6 percent, the Nasdaq 100 e-minis were 0.7 percent higher with Dow e-minis also up 0.9 percent.
"A combination of a dollar-yen level above 111 and higher U.S. stock futures is favourable to Japanese stocks, while sentiment has recovered," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
Daiwa Securities research found that companies expect a 2 percent rise in pre-tax profits for the fiscal year through March 2019, and most of them expect the dollar to trade at 105 yen on average.
A weaker yen boosts the profits Japanese earn abroad when they are repatriated.
TDK Corp rose 2.2 percent, Daikin Industries was up 1.4 percent and Nitto Denko gained 2.2 percent.
Insurers and banks underperformed. MS&AD Insurance fell 4.0 percent, while Mizuho Financial Group shed 0.8 percent.
Elsewhere, Japan Tobacco slid 1.3 percent after the company reported weaker domestic market tobacco sales in the month of April.
Editing by Sam Holmes