Japan's Nikkei trades higher after robust US retail data

TOKYO, Oct 18 (Reuters) - Japan's Nikkei share average traded higher on Friday, after robust U.S. retail data for September lifted the Dow, but a decline in heavyweight technology stocks capped gains.

The Nikkei .N225 was up 0.38% at 39,058.32 by the midday break but is set to fall 1.38% for the week.

The broader Topix .TOPX traded 0.31% higher at 2,696.06 but is poised to lose 0.37% for the week.

The Dow Jones Industrial Average advanced on Thursday to its fourth record close in the last five sessions, as stronger-than-expected monthly retail sales indicated a robust U.S. consumer and TSMC's upbeat forecast buoyed chipmakers' stocks. .N

"The Nikkei rose as sentiment was lifted by optimism of the U.S. economy," said Kentaro Hayashi, senior strategist at Daiwa Securities.

Uniqlo-owner Fast Retailing rose 1.15% to become the biggest support to the Nikkei. Chipmaking device supplier Disco 6146.T jumped 6.75%.

Technology investor SoftBank Group 9984.T lost 0.65% to weigh the most on the Nikkei.

Chip-testing equipment maker Advantest 6857.T dropped, while Tokyo Electron 8035.T erased early losses to rise 0.47%.

These heavyweights were sold as investors wanted to book profits, said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

"Despite the yen's weakness and the strength of U.S. equities, gains of domestic shares are limited. That is partly due to uncertainties about Japanese politics," Arisawa said.

Japan's ruling party may lose its majority in the lower house, according to media polling ahead of the Oct. 27 election, meaning it would likely have to rely on coalition partner Komeito to stay in power.

The U.S. dollar headed for a third weekly gain in a row on Friday, after touching 150 yen against the Japanese currency for the first time since Aug. 1. FRX/

A softer yen tends to help exporter shares as it increases the value of overseas profits in yen terms when firms repatriate them to Japan.

The banking sector .IBNKS.T rose 1.42% to become the best performer among the Tokyo Stock Exchange's 33 industry sub-indexes after U.S. Treasury yields rose overnight.

(Reporting by Junko Fujita; Editing by Sumana Nandy)

((junko.fujita@thomsonreuters.com;))