TOKYO, May 17 (Reuters) - Japan’s Nikkei share average followed U.S. stocks higher on Thursday morning after Wall Street gained overnight, with financial stocks rallying on an increase in U.S. bond yields.
The Nikkei gained 0.5 percent to 22,824.73 in midmorning trade as a weaker yen helped overall sentiment.
Wall Street indexes ended higher as small-cap stocks surged, even as a rise in U.S. bond yields to an almost seven-year high suggested more competition for equities and investors fretted over global politics.
Japanese banks and insurers, which invest in higher-yielding products such as foreign bonds, rallied. Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group both soared 2.1 percent, while Dai-ichi Life Holdings surged 1.3 percent.
Yields on 10-year U.S. Treasuries hit 3.10 percent on Wednesday for the first time since July 2011.
“Investors are still worried about rising U.S. yields. But as long as the yield’s rise is gradual, the market is likely to withstand it,” said Masashi Oda, general manager of the strategic investment department at Sumitomo Mitsui Trust Asset Management.
The weaker yen supported big exporters such tech companies. Advantest Corp gained 1.8 percent, Kyocera Corp added 0.9 percent and Sumco advanced 2.0 percent.
The broader Topix gained 0.3 percent to 1,806.29. (Reporting by Ayai Tomisawa Editing by Eric Meijer)