Nikkei rises on tech gains; Sony jumps on buyback, Microsoft tie-up

* Nikkei up 1.59%, could post small weekly gains
* Sony jumps 10% on share buyback, Microsoft partnership
* Communication equipment makers gain on rally in U.S. peers
* Investors look to Monday's GDP, sales tax debate

By Hideyuki Sano
TOKYO, May 17 (Reuters) - Japan's Nikkei share average
jumped on Friday and looked set to end the week with a slight
gain, led by rallies in Sony 6758.T and technology shares,
though concerns about U.S.-China tensions kept many investors
cautious.
The Nikkei rose 1.56% to 21,391 points by midday. For the
week, it was on track to add 0.2 percent.
The broader Topix .TOPX rose 1.59% to 1,561.94, up 0.8% so
far this week.
The rally was led by electric machinery .IELEC.T and
precision machinery makers .IPRCS.T , which both rose more than
2%.
Sony 6758.T jumped 9.9% after it announced a share buyback
and strategic partnership with Microsoft Corp MSFT.O on areas
such as streaming games, media and new image sensors.
Softbank Group 9984.T , a major investor in a whole gamut
of U.S. tech firms, gained 3.9%.
Some communication equipment manufacturers rose after upbeat
earnings boosted Cisco CSCO.O 6.6%, helping to drive up the
Nasdaq Telecommunication index .IXUT 4.2%, the second biggest
gain in the past four years.
Some market players suspect those shares were helped by
speculation of possible windfalls from Washington's tough stance
on China's Huawei, their strongest rival.
NEC 6701.T rose 3.1% while Fujitsu 6702.T gained 1.7%.
On the other hand, Murata Manufacturing 6981.T , a Huawei
supplier, extended losses, falling 0.6%. Murata has plunged 19%
so far this month.
"I think Japanese share markets will remain capped for now,
given the perception that (they) will be susceptible to foreign
demand and vulnerable to trade tensions," said Hiroyuki Ueno,
senior strategist at Sumitomo Mitsui Trust Asset Management.
Investors also looked to Japan's GDP data due on Monday,
which is expected to show the country's economy contracted in
the first three months of this year and could prod the
government to delay a sales tax hike slated for October.
Japanese corporate earnings have been weaker than
expectations as the economy has stagnated.
A case in point was brokerage shares index .ISECU.T , which
hit its lowest level since August 2016 before recovering to
positive territory.
Industry leader Nomura Holdings 8604.T also hit
near-three-year low and last stood up 0.1 percent.

(Editing by Kim Coghill)