TOKYO, May 21 (Reuters) - Japan's Nikkei share average rose on Monday morning as exporters were boosted by a rise in the dollar rise against the yen.
The dollar's rise followed news of an easing in U.S.-China trade tensions, offsetting weakness in financial stocks after recent gains in U.S. yields levelled off.
The Nikkei advanced 0.4 percent to 23,023.51 in midmorning trade, after the dollar rose 0.2 percent to 110.99 yen in early Asian trade, nearing a four-month high of 111.085 yen set on Friday.
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 February 2.
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 0.8 percent higher with Dow e-minis also up 0.8 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 pretax 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 1.7 percent and Nitto Denko gained 1.8 percent.
Insurers and banks underperformed. MS&AD Insurance fell 2.6 percent, while Mizuho Financial Group shed 0.7 percent.
Elsewhere, Japan Tobacco slid 0.9 percent after the company reported weaker domestic market tobacco sales in the month of April.
The broader Topix rose 0.2 percent to 1,819.35. (Reorting by Ayai Tomisawa Editing by Eric Meijer)