* Investors are 'risk on', but caution as overbought signs loom - analyst * Nikkei may break above 15,000 - analyst * Sharp soars on hopes for bolstering financial base through fund raise By Ayai Tomisawa TOKYO, July 19 (Reuters) - Japan's Nikkei share average extended its gains into a sixth day and rose to a new eight-week high on Friday, helped by advances on Wall Street and a weakening yen, while expectations of a ruling party victory in this weekend's upper house election supported sentiment. The Nikkei rose 0.6 percent to 14,898.38 in mid-morning trade after climbing as high as 14,953.29, the highest intraday level since May 24. "The Nikkei may breach 15,000 later in the day as it's an inch away," said Yoshiyuki Kondo, an analyst at Daiwa Securities. But he noted that the Nikkei, after rising for six straight days, could soon shows signs that the market is overbought. "Most investors are taking a 'risk on' stance on improving market conditions, but there is a bit of caution against the steep rise in the market," Kondo said. The Nikkei is trading 8 percent above its 25-day moving average of 13,807.47. Exporters were in demand as the dollar last traded at 100.79 yen, breaking above Thursday's session high of 100.65 yen. Panasonic Corp rose 1.5 percent, Toshiba Corp added 1.0 percent and Toyota Motor Corp gained 0.7 percent. Sharp Corp climbed 5 percent after Kyodo news agency said the company plans a public offering of 90 billion yen by end-September, while two sources familiar with the matter told Reuters that it plans to raise 10 billion yen through a share sale to housing appliance maker Lixil Group Corp. "The fact that they (Sharp) are going to get funds from direct investment from other companies seems a very positive thing. It's non-dilutive to a degree," a Tokyo-based trader said. "It's dilutive on an EPS basis and dividend, but they don't pay a dividend, so nobody cares." The Topix gained 0.2 percent to 1,224.49. U.S. stocks closed at record highs on Thursday on strong corporate earnings, while Congressional testimony by Federal Reserve Chairman Ben Bernanke on monetary policy further reassured markets. In the domestic market, hopes for an economic recovery are boosting investors' appetites, while Prime Minister Shinzo Abe's Liberal Democratic Party-led bloc is expected to win a hefty majority in the upper house election on July 21. That victory, if it occurs, would end the "twisted Diet" in which the opposition controls the upper chamber, giving Abe more freedom to push "Abenomics", his aggressive monetary easing and government spending policies. "The market welcomes the end of a twisted Diet as it would make it easier to pass legislation and there are hopes that the government will implement an effective growth strategy soon," said Yutaka Miura, a senior technical analyst at Mizuho Securities. With the April-June earnings season around the corner, analysts said expectations of higher profits were growing as the yen weakened, improving export earnings. The Nikkei has dropped around 7 percent since the year's peak on May 23, but is still up 43 percent this year.