(Updates with closing prices)

TOKYO, Feb 13 (Reuters) - Japan's Nikkei share average

ended more than 1% higher on Thursday as a weak yen boosted

appetite, masking losses of heavyweight SoftBank Group on its

surprise quarterly loss.

The Nikkei rose 1.28% to close at 39,461.47 in its

biggest daily percentage gain since Jan. 22, and posted a third

straight session of gains.

"Last month, Japanese stocks were dragged lower by

worries about the yen's strength. But those concerns have eased

for now as the yen fell against the dollar," said Fumio

Matsumoto, chief strategist at Okasan Securities.

After Bank of Japan (BOJ) raised short-term interest rates

to 0.5% last month, expectations grew that the central bank may

raise rates faster and higher, driving the yen to rise against

the U.S. dollar.

"The market view on the BOJ's monetary policy has not

changed but the Federal Reserve may not cut interest rates as

expected and that changed the course of the yen," Matsumoto

said.

The dollar rose to a one-week high against the yen

overnight, as a hotter-than-expected consumer prices reading

raised expectations that the Fed will hold rates higher for

longer.

A weaker Japanese currency tends to boost exporters' shares,

as it increases the value of overseas profits in yen terms when

firms repatriate them to Japan.

Trend Micro ( TMICF ) surged 16%, hitting the daily limit,

after Reuters reported Bain Capital, Advent International and

EQT AB are among private equity firms competing to acquire the

Japanese cybersecurity firm.

SoftBank Group fell 3.57% to drag the Nikkei the

most after the tech investor posted a $2.4 billion quarterly

loss, hit by a decline in the value of e-commerce platform

Coupang and other companies held by its Vision Fund investment

arm.

Of more than 1,600 stocks on the Tokyo Stock Exchange's

prime market, 76% of shares rose and 20% fell, with 2% trading

flat.

(Reporting by Junko Fujita; Editing by Sumana Nandy and Mrigank

Dhaniwala)