* Buying before ex-dividend day may kick in this week - analyst
* Sharp tumbles after media reports Hon Hai may reduce capital injection
* All sectors in positive territory
By Ayai Tomisawa
TOKYO, March 22 (Reuters) - Japan's Nikkei share average rose sharply on Tuesday as the dollar extended its rebound against the yen after two U.S. Federal Reserve officials supported the case for an interest rate hike sooner than later.
The Nikkei rose 2.1 percent to 17,066.07 by mid-morning trade after falling 1.3 percent on Friday. Markets in Japan were closed on Monday for a national holiday.
A rise in Wall Street on Friday also helped investor sentiment, with the S&P 500 closing positive for the year for the first time in 2016.
Atlanta Fed President Dennis Lockhart said there was sufficient economic momentum to justify a further rate hike "possibly as early as the meeting scheduled for end of April".
San Francisco Federal Reserve Bank President John Williams told Market News International that April or June would be "potential times for a rate hike."
The dollar rose back above 112.00 yen, recovering from a 16-1/2 month trough of 110.67 hit last week, lifting such exporters as Toyota Motor Corp and Honda Motor Co , which rose 3.8 percent and 2.9 percent, respectively.
"People who bought the yen and sold stocks last week seem to be unwinding their positions," said Takuya Takahashi, a strategist at Daiwa Securities. "The market will likely stay resilient this week as buying before the ex-dividend date should also help."
For companies that close their books for their full year on March 31, Monday is the final day that an investor could buy their stock and qualify for dividends.
Sharp Corp dived as much as 8.0 percent after media reported that Taiwan's Foxconn is likely to reduce its capital injection into Sharp from an initial plan of 489 billion yen.
The broader Topix gained 2.1 percent to 1,373.23, with all of its 33 subsectors in positive territory.
The JPX-Nikkei Index 400 advanced 2.1 percent to 12,403.75. (Editing by Kim Coghill)