* Nikkei up 2.1 pct, Topix gains 1.9 pct
* Exporters, financials log gains
* Fed's improved U.S. outlook, retail data buoy Nikkei
* Megabanks outperform in heavy trade
By Mari Saito
TOKYO, March 14 (Reuters) - Japan's Nikkei share average climbed to a fresh seven-month high on Wednesday, boosted by Wall Street gains after the Federal Reserve upgraded its U.S. economic outlook while Tokyo bluechips got a further lift from the softer yen.
Exporters and financials outperformed, with Sony Corp jumping 4.3 percent, construction machinery maker Komatsu Ltd rising 3.2 percent and Japan's leading investment bank Nomura Holdings up 3.4 percent.
"People are picking up high-beta stocks now, as the feeling that Japan's market is still lagging global markets -- plus the weaker yen -- are providing a boost," said Yasuo Sakuma, portfolio manager at Bayview Asset Management.
The benchmark Nikkei gained 195.81 points to 10,100.34 and climbed above the 10,000 mark for a fourth straight session to its highest level since late July.
In Japan, some market players said a real test of investor confidence would be whether the index can close above the closely watched 10,000 on Wednesday. The index has breached the 10,000 mark for three sessions in a row, but has so far failed to close above the level.
The broader Topix was up 1.9 percent at 861.23.
The softer yen also boosted the Nikkei after the dollar hit a fresh 11-month high of 83.18 yen.
Among the most heavily traded shares were Japanese megabanks Mizuho Financial Group, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group, up between 2.2 and 2.6 percent.
Japan's financials gained broadly after their U.S. counterparts led Wall Street to its best performance this year, buoyed also by Fed stress test results that gave high marks to most of the largest banks.
The stress test results by the central bank came on the heels of an earlier announcement that the U.S. economy was "expanding moderately" although growth still faced significant downside risks.
Tuesday marked the first time that the Nasdaq closed above 3,000 and the Dow above 13,000 on the same day, also lifted by U.S. February retail sales recording their largest gain in five months despite rising gasoline prices.
"The U.S. economic picture has clearly brightened, monetary easing efforts have increased liquidity and boosted equities worldwide and, despite the fact that Japanese investors are heading into the book-closing period, demand remains strong," said Hiroichi Nishi, equity general manager at SMBC Nikko Securities.
March is the final month of Japan's fiscal year, and market participants have been expecting many funds to lock in profits from the benchmark's 19 percent rally since the beginning of January, after shedding more than 13 percent in April to December.