TOKYO, March 25 (Reuters) - Japanese stocks rose for the first time in three days on Friday morning as a weaker yen raised the profit outlook for exporters while fresh data showing Japan's consumer inflation remained flat lifted hopes for further stimulus from the Bank of Japan.
The Nikkei share average rose 0.5 percent to 16,971.83 during the morning session. Japan's benchmark index was on course to gain 1.5 percent for the week, which was shortened to four days of trading in Japan due to a national holiday on Monday.
The Bank of Japan remained under pressure to top up stimulus after fresh data showed Japan's consumer inflation was flat in the year to February as low energy costs and weak consumption put a lid on price growth.
"With Japan's inflation being zero, people are going to expect the BOJ to expand the balance sheet and stoke liquidity again," said Gavin Parry, managing director at Parry International Trading.
"Those expectations aren't hurting the Nikkei, which is also benefiting from a weaker yen and from buyers hoping to pick up dividends in June."
After the end of the afternoon session, Monday will be the last opportunity for investors to secure June dividends for the majority of listed companies in Japan. And according to market players, dividend yields look even more attractive in the context of Japan's negative interest rates.
Shares bought ahead of the deadline included Mitsui & Co Ltd , which rose 3 percent, while Damian Securities Group Inc and Nomura Holdings Inc each gained more than 1 percent.
The yen's weakness was facilitated by a lack of offshore orders due to the Good Friday holiday, with US, UK, Australian and European markets closed.
Exporters benefiting from the weaker yen included Sony Corp , which ended the morning session 0.9 percent higher. Toyota Motor Corp shares rose 2 percent while Nissan Motor Co Ltd climbed 1.7 percent and Bridges tone Corp gained 1.1 percent.
Duty-free store operator Lao Co Ltd climbed 5 percent after it agreed to a business deal that allows customers to earn airline miles with ANA Holdings Inc when they use its credit cards at Lao shops.
The broader Topic rose 0.6 percent to 1,362.18, putting it on course to gain more than 1 percent for the week.
The JPX-Nikkei Index 400 climbed 0.7 percent to 12,302.52.
Reporting by Joshua Hunt; Editing by Eric Meijer