Japan's Nikkei heads for best week in 3 months on trade deal hopes

TOKYO, April 18 (Reuters) - Japan's Nikkei share average headed for its best week in three months on Friday, as investors turned more hopeful that U.S. President Donald Trump would be able to broker trade deals with some of its top trading partners, including Japan.

The Nikkei .N225 touched a two-week high of 34,651.91 before ending the morning session up 0.6% at 34,583.29, despite somewhat muted trading due to Easter holidays in most other markets.

The broader Topix .TOPX added 0.8%.

The Nikkei is on course to rise 3% this week - the most since January 20 - and to snap a three-week losing run.

On Thursday, Trump and close ally Italian Prime Minister Giorgia Meloni expressed optimism about resolving U.S.-European Union trade tensions. Trump also signalled a potential end to tit-for-tat tariff hikes with China.

A day earlier, Japan's top negotiator, economy minister Ryosei Akazawa, kicked off dialogue in Washington, and told reporters aftewards that Trump had said getting a deal with Japan was a "top priority". Trump hailed discussions with Japan on social media, saying "Big Progress!"

"The mood seemed overall quite positive, underscored by Trump's social media post featuring a smiling photo of him with Akazawa in the Oval Office," said James Brady, vice president at advisory firm Teneo.

"The general sense is that the discussions got off to a reasonable start."

Shipping .ISHIP.T was the second-best performer among the Tokyo Stock Exchange's 33 industry groupings, gaining 3.4%.

Pharmaceuticals .IPHAM.T topped the list with a 4.1% jump, led by a 17.7% surge for Chugai Pharmaceutical 4519.T after an obesity drug it developed and licenced to Eli Lilly LLY.O performed well in clinical trials.

Chip-sector shares dragged on the Nikkei though, as investors resumed selling after a rebound on Thursday.

Advantest 6857.T sagged 2% and Screen Holdings 7735.T dropped 3.1% to be the Nikkei's worst performer.