TOKYO, Aug 18 (Reuters) - Japan's Nikkei share average inched lower on Friday amid concerns about China's economic outlook and fears for rising yields, while gains in Chinese shares improved sentiment.

The Nikkei index was down 0.19% to 31,565.21 by the midday break, after falling as much as 1.1% earlier in the session. The Nikkei is poised to lose for a third straight session and has slid 2.8% for the week.

The broader Topix lost 0.42% to 2,243.56 and is on course to lose 2.6% for the week.

"The Japanese market slipped for the same reasons in the past few sessions - concerns on the economy in China and rising global yields. Japanese equities were easily affected by overseas cues as there were no market moving catalysts in Japan at the moment," said Shuji Hosoi, senior strategist at Daiwa Securities.

"The Nikkei cut most of losses because slides in Chinese shares appeared to have paused."

Overnight Benchmark 10-year U.S. Treasury yields hit their highest levels since October and 30-year yields hit 12-year highs on concerns that the Federal Reserve will hold interest rates higher for longer.

The weakness in U.S. equities also weighed on sentiment, said Takamasa Ikeda, senior portfolio manager at GCI Asset Management.

Overnight, Wall Street ended lower, with the Nasdaq posting 3.4% drop over three days in its deepest three-day drop since February.

"The Nikkei index has already reached its peak as buying momentum of foreign investors has been weakening since July," Ikeda said.

Among individual shares, Uniqlo brand owner Fast Retailing lost 0.6% and was the biggest drag on the Nikkei.

Heavyweights chip-related shares rose to provide the biggest support to the Nikkei, with Advantest and Tokyo Electron gaining 2.64% ad 1.44%, respectively.

Of the 225 Nikkei components, 72 stocks rose, 152 fell and one was flat. (Reporting by Junko Fujita; Editing by Rashmi Aich)