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 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 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.

"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

jumped 6.75%.

Technology investor SoftBank Group lost 0.65% to

weigh the most on the Nikkei.

Chip-testing equipment maker Advantest ( ADTTF ) dropped,

while Tokyo Electron ( TOELF ) 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.

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 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.