TOKYO, Jan 7 Japan's Nikkei share average is set to test a 23-month high on Monday, helped by encouraging U.S. economic data, while a weakening yen will likely buoy exporters and bank shares could gain from a rule change. The Nikkei was likely to trade between 10,700 and 10,850 on Monday, strategists said, after jumping 2.8 percent at 10,688.11 on Friday, its highest close since March 4, 2011. If the index touches the 10,800-mark, it will be the first time since Feb. 21, 2011. Foreign brokers put in net buy orders of 11.3 million shares, the largest net purchase since Dec. 17. "Japanese shares will likely continue attracting buying as the conditions are good for them," said Hiroichi Nishi, general manager at SMBC Nikko Securities, adding that some investors see believe exporters' earnings will be better than expected. On Friday, the dollar climbed to a nearly 2-1/2 year peak against the yen after the Federal Reserve flagged concerns about the risks of its stimulative monetary policy. The dollar rose as high as 88.40 yen, according to Reuters data, the highest since July 2010. A weak yen lifts exporters' overseas earnings when repatriated. The Japanese banking sector will benefit after global regulators gave banks more time to build up cash buffers, allowing them to divert some of their reserves to helping struggling economies grow. "Japanese banks are on track to meet the requirements and they are working towards them anyway, so it is unlikely that the news will affect them largely, but sentiment should be positive," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "Since the market has stayed strong and volume is rising, the climate is positive for banking shares anyway." Nikkei futures in Chicago closed at 10,760, up 0.7 percent from the close in Osaka of 10,680. > S&P 500 finishes at 5-year high on economic data > Dollar scales nearly 2-1/2 year peak vs yen; euro up > US yields hover near 8-month high on Fed policy fears > Gold drops but pares losses after U.S. payrolls > Brent crude falls, demand concerns offset US jobs data STOCKS TO WATCH --Fast Retailing Co Ltd Fast Retailing said on Friday that same-store sales at its Uniqlo clothing chain in Japan rose 4.5 percent in December from a year earlier, up for the second straight month, due to solid sales of winter clothing. --Mazda Motor Corp Mazda said on Friday it sold 17,273 cars in China in December, down 26.4 percent from a year earlier, as Chinese consumers continue to shun Japanese cars amid a lingering territorial row between the two Asian neighbors.