Nikkei ends 1 pct up on futures buying, posts 3rd week of gains

* Nikkei gains 0.8 pct on the week

* Subaru underperforms on recall announcement

TOKYO, March 1 (Reuters) - Tokyo’s Nikkei share average surged to 2-1/2-month highs on futures buying after the dollar rose against the yen on the back of strong U.S. economic growth, giving Japanese exporters a boost.

The Nikkei rose 1.0 percent to 21,602.69, the highest close since Dec. 13. For the week, the benchmark index gained 0.8 percent and posted its third straight weekly gain.

Exporters took advantage of a weaker yen after the dollar rose 0.4 percent to 111.73 yen, the highest level since Dec. 20.

“Short-term investors are seen buying back futures while they pick up cheap cyclical shares as the yen is weaker,” said Naoki Fujiwara, a fund manager at Shinkin Asset Management.

TDK Corp rallied 4.3 percent, Advantest Corp jumped 4.1 percent and Fanuc Corp gained 1.9 percent.

In the United States, a major market for Japan, gross domestic product increased at a 2.6 percent annualised rate in the fourth quarter after advancing at a 3.4 percent pace in the July-September period, stronger than a 2.3 percent rate forecast by Reuters economists.

Analysts said the market will remain cautious as it tracks developments in U.S.-Sino trade negotiations. U.S. President Donald Trump warned on Thursday that he could walk away from a trade deal with China if it wasn’t good enough.

The collapse on Thursday of the summit between Trump and North Korean leader Kim Jong Un on denuclearisation of the Korean Peninsula had also soured market sentiment, though the impact on trading during the Friday session was negligible.

Subaru Corp underperformed and was only up 0.1 percent after falling 1.4 percent after the automaker announced a recall of 2.26 million vehicles around the world over a brake lamp defect.

The broader Topix rose 0.5 percent to 1,615.72. Advancing issues outnumbered declining ones 1,180 to 859. (Editing by Jacqueline Wong)