(Updates at midday break)

TOKYO, Aug 22 (Reuters) - Japan's Nikkei share average

hit a three-week high on Thursday, tracking overnight Wall

Street advances, with heavyweight Fast Retailing ( FRCOF ) and technology

stocks leading the gains.

Nikkei index was up 0.63% at 38,190.85 by the midday

break, after rising to 38,408.19, its highest level since Aug.

1.

"Heavyweight technology stocks rose but the yen weakened a

little bit after the market opened in Japan, which lifted stocks

that would have fallen in the current foreign currency market

condition," said Kentaro Hayashi, senior strategist at Daiwa

Securities.

Overnight the yen strengthened to below the

psychological 145 barrier against the U.S. dollar but it lost

momentum, and was last trading around 145.47.

U.S. stocks advanced on Wednesday after investors parsed a

steep downward revision in payrolls, and the release of the

minutes from the Federal Reserve's most recent meeting, which

cemented expectations for a September interest rate cut.

Uniqlo-brand owner Fast Retailing ( FRCOF ) rose 1.34% to

boost the Nikkei the most. Chip-testing equipment maker

Advantest ( ADTTF ) jumped 2.14%.

The broader Topix edged up 0.08% to 2,666.92.

A smaller gain in the Topix compared with the Nikkei

suggested that the market was led by gains in heavyweight

technology stocks, said Hayashi.

Toyota Motor ( TM ) fell 1.75% and was the biggest drag on

the Topix index, but its peer Honda Motor ( HMC ) inched up

0.1% and Mazda Motor ( MZDAF ) rose 0.2%.

Japan Tobacco ( JAPAF ) rose 1.56%, after the tobacco

and drink maker agreed to acquire U.S.-based Vector Group ( VGR )

in a deal worth around $2.4 billion.

The drug sector rose 1.78% to become the top

performer among the Tokyo Stock Exchange's 33 industry

sub-indexes.

The brokerage sector fell 1.59% and was the

worst performer. The banking sector fell 1.04%.