* Nikkei trades 5 pct above 25-day moving average
* Steel shares underperform after U.S. anti-dumping probe
* Olympus dives after profit forecast undershoots expectation
By Ayai Tomisawa
TOKYO, May 8 (Reuters) - Japan’s Nikkei share average hit a level not seen in nearly 17 months on Monday morning as the yen stayed weak after Emmanuel Macron was elected president of France, as a business-friendly vision of European integration helped boost investor confidence.
The Nikkei soared 1.8 percent to 19,804.20, the highest since December 2015.
Macron’s resounding defeat of a nationalist who had threatened to take France out of the European Union brought relief to investors who had feared another populist upheaval after Britain’s vote to exit the European Union last year.
“Investors are buying back cyclical shares as they are relieved,” said Hikaru Sato, a senior technical analyst at Daiwa Securities.
But he added that as the Nikkei has gained sharply over the past few weeks on earnings optimism and the market was starting to show signs of being technically overbought.
As of Monday, the Nikkei traded 5 percent above its 25-day moving average of 18,849.82.
The dollar was steady on the day at 112.79 yen, after jumping to a seven-week high of 113.14 yen in early trade.
Financial stocks were helped by rising risk sentiment. Mitsubishi UFJ Financial Group surged 2.1 percent, Mizuho Financial Group soared 1.4 percent and Nomura Holdings jumped 3.0 percent.
Exporters gained ground, with Panasonic Corp rising 2.4 percent and Canon Inc gaining 1.3 percent.
On the other hand, steel shares underperformed after U.S. trade officials on Friday said their anti-dumping and subsidy probe found carbon and steel cut-to-length plate from eight other countries harms American producers, locking in duties on the imports for five years.
JFE Holdings and Nippon Steel and Sumitomo Metal Corp both fell 1.0 percent.
Elsewhere, Olympus Corp tumbled more than 8 percent after the firm said it expected an operating profit of 79 billion yen for the year through March 2018. That was below market expectations of 90 billion yen, the median forecast by 18 analysts polled by Thomson Reuters.
The broader Topix rose 1.9 percent to 1,579.78 and the JPX-Nikkei Index 400 advanced 1.9 percent to 14,113.77. (Editing by Jacqueline Wong)