* Nikkei poised to post best weekly performance in 2 months
* China’s upbeat industrial output helps support sentiment
* Investors applaud Turkey’s central bank action - analyst
By Ayai Tomisawa
TOKYO, Sept 14 (Reuters) - Japan’s Nikkei share average rallied to over a seven-month high on Friday morning as sentiment improved on signs China and the United States could set aside their differences and resolve a heated trade dispute.
The Nikkei gained 1.0 percent to 23,042.83 at the midday break, after rising as high as 23,053.10 to hit the highest point since early February.
For the week, the benchmark index has gained 3.3 percent, poised to post the best weekly performance in two months.
The Japanese market was under pressure over the past few weeks as worries about global trade friction dented sentiment, but moves by China and the United States to hold fresh talks over their tariff dispute have induced some buyers into the markets, analysts said.
“There is even optimism for U.S.-Japan trade talks,” said Chisato Haganuma, chief strategist at Mitsubishi UFJ Morgan Stanley Securities.
On Wednesday, the Trump administration invited Beijing for a new round of talks, even as Washington prepared to slap tariffs on $200 billion worth of Chinese goods. Beijing has welcomed the invitation.
Mitsubishi’s Haganuma added that a recovery in emerging market currencies is also helping sentiment, after Turkey’s central bank raised its benchmark rate by 625 basis points on Thursday in a move that boosted the lira.
“The market had been worried that no policy decision would be made amid the Turkish crisis. But investors applauded the move by Turkey’s central bank to actually take action by raising interest rates to save the falling currency,” Haganuma said.
Exporters rose as investors took heart from the weak yen. The dollar was up 0.1 percent at 112.03 yen after rising to 112.08 yen.
Chip-related shares and machinery stocks gained ground, with Advantest Corp surging 4.2 percent, Tokyo Electron up 1.9 percent, Yaskawa Electric jumping 7 percent and TDK Corp climbing 4.2 percent.
Investors also appeared to be encouraged by China’s upbeat industrial output data for August.
Industrial robot maker Fanuc Corp gained 3.2 percent and Keyence Corp added 4.1 percent.
The broader Topix gained 1.0 percent to 1,727.84. (Editing by Shri Navaratnam)