* Financial stocks outperform on rising US Treasury yields
* Foreign investors’ risk appetite strengthens - analyst
By Ayai Tomisawa
TOKYO, March 2 (Reuters) - Japan’s Nikkei share average hit a 14-month high on Thursday after Wall Street soared and the dollar gained on rising expectations the U.S. Federal Reserve will hike interest rates in March.
The Nikkei gained 1.1 percent to 19,605.85 points in mid-morning trade, after climbing as high as 19,668.01 in early trade, the highest level since December 2015.
The Dow on Wednesday blasted through the 21,000 mark for the first time, supported by a chorus of central bank officials signalling rates may increase as soon as mid-March.
Federal Reserve Governor Lael Brainard said late on Wednesday it will be “appropriate soon” for the Fed to raise rates.
“The perceived expectations for a rate hike in March became even stronger when the market heard Brainard saying ‘soon’,” said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
Adding to hopes of stronger economic growth, the Institute for Supply Management said its manufacturing index in the U.S. rose in February to its highest since 2014.
“When the U.S. economy is strong, foreign investors’ risk stance on investment in overseas shares strengthens,” Fujito said.
Thirty-two of the Topix’s 33 subsectors rose, with financial stocks and exporters outperforming.
Insurers and banks soared after U.S. Treasury yields rose. Dai-ichi Life Holdings Inc jumped 4.8 percent, Sompo Holdings Inc surged 2.0 percent, and Mitsubishi UFJ Financial Group Inc gained 3.1 percent.
Honda Motor Co Ltd added 1.3 percent, Nissan Motor Co Ltd gained 1.2 percent, and Advantest Corp climbed 1.5 percent after the dollar rose 0.3 percent, hitting a fresh two-week high of 114.16 yen.
The broader Topix added 1.1 percent to 1,569.36 points, and the JPX-Nikkei Index 400 advanced 1.1 percent to 14,069.73 points.
Editing by Randy Fabi