Japan's Nikkei share average rose on Wednesday morning, on track for a record 17th day of gains as bullish Wall Street underpinned sentiment, while construction equipment makers soared after Caterpillar posted robust earnings.

The Japanese market extended its unprecedented rally this week, with the victory of Prime Minister Shinzo Abe's coalition in Sunday's election raising the prospect of continued stimulus.

Financial stocks attracted buyers after US benchmark 10-year Treasury note yields rose to their highest in more than five months on Tuesday.

The Nikkei opened 0.4 per cent higher, and was up 0.2 per cent at 21,845.75 in midmorning trade.

With the Dow Jones industrial average closing at a record high, and US yields rising, traders said it was indicative of US economic strength which lifted investor appetite for risky assets. “As long as US stocks are strong, Japanese stocks will likely follow suit,” said Hikaru Sato, a senior technical analyst at Daiwa Securities. “But there is caution against the rally and I wouldn't be surprised if the market turns around.”

Although the market was resilient on Wednesday, declining issues outweighed advancing ones by 51 per cent to 43 per cent.

Construction equipment makers Komatsu Ltd and Hitachi Construction Machinery soared 3.1 per cent and 0.8 per cent, respectively after Caterpillar Inc blew past Wall Street's profit and revenue estimates for the third quarter.

Insures and banks also staged a rally, with Dai-ichi Life Holdings rising 2.0 per cent, Sompo Holdings gaining 1.9 per cent and Mitsubishi UFJ Financial Group surging 2.8 per cent.

Defensive stocks such as drugmakers, food manufacturers and utility firms were the three worst performers on the board. Eisai dropped 1.1 per cent, Ajinomoto Co shed 0.8 percent and Tokyo Gas declined 1.8 per cent.

The broader Topix gained 0.2 per cent to 1,759.62.

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