TOKYO, May 18 (Reuters) - Japan's Nikkei share average rose to a 3-1/2-month high on Friday morning after a weaker yen lifted exporters, while financial stocks extended their rally as U.S. bond yields remained high.
The Nikkei gained 0.3 percent to 22,903.33 in midmorning trade. The benchmark index has risen 0.7 percent so far this week and is poised to post the eighth straight week of gains, the longest winning streak since a nine-week stretch between September and November.
The dollar rose to its strongest level since Jan. 23 against the yen, hitting 110.98.
Analysts say the Nikkei may touch a psychologically important level of 23,000 if the dollar moves above 111 yen, although investors are unlikely take large positions before the weekend.
"There are geopolitical concerns and major events that are making investors cautious now, so even if they chase the market higher, the gains may be limited," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
Market players remain nervous about U.S.-China trade tensions after U.S. President Donald Trump said the world's second largest economy had "become very spoiled on trade".
The weaker yen helped exporters with TDK Corp surging 2.1 percent, Nissan Motor rising 0.8 percent and Honda Motor soaring 1.2 percent.
Financials such as insurers advanced, with T&D Holdings gaining 1.7 percent and Dai-ichi Life Holdings adding 0.9 percent, after U.S. 10-year Treasury yields rose to a near seven-year peak on Thursday, extending this week's bond market selloff.
Elsewhere, PeptiDream jumped 3.2 percent after the pharmaceutical research company said that it completed the transfer of its proprietary peptide discovery technology to Shionogi & Co Ltd.
The broader Topix gained 0.2 percent to 1,812.61. (Editing by Sam Holmes)