* Market assesses pros and cons of weak yen - traders * Nikkei posts longest winning streak since last August By Ayai Tomisawa TOKYO, May 27 (Reuters) - Japan's Nikkei share average was marginally higher on Wednesday morning, extending its gains into a ninth day, but gains were limited as U.S. shares languished after upbeat U.S. data fed fears that a rate hike may come earlier than expected.

The Nikkei 225 rose 0.1 percent to 20,453.65 in midmorning trade after traversing negative and positive territory. The index rose for nine consecutive days, the longest winning streak since last August. In the past eight days, the index soared 4.4 percent.

U.S. stocks fell and the dollar rose to an eight-year high against the yen after a gauge of U.S. business investment spending plans rose solidly in April, consumer confidence perked up this month, and house prices extended gains in March.

The buoyant data follows Federal Reserve Chair Janet Yellen saying on Friday that the central bank could raise interest rates this year if the economy keeps improving as expected.

Market observers said that the Japanese market may stay directionless for the time being while investors assess the pros and cons of a weakening yen, after the dollar surged to an eight-year peak of 123.33 yen overnight.

"A weaker yen is negative to the energy sector and to other importers, but for now, the stock market seems to appreciate it as it helps most manufacturers' earnings and boosts inbound tourism," said Fujio Ando, senior managing director at Chibagin Asset Management.

But Ando said that in the mid-to-long term, investors may look more to the weak yen's negative effects on the Japanese economy and take profits from recent gains.

Meantime, Japan's top government spokesman said on Tuesday recent moves in the yen were not "sudden" and had no impact on the economy.

Exporters were strong, with Toyota Motor Corp rising 0.6 percent, Honda Motor Co adding 0.7 percent and Panasonic Corp advancing 0.6 percent.

Utility stocks lost ground, with Chubu Electric Power Co falling 0.5 percent and Tokyo Gas Co shedding 1.0 percent.

The broader Topix dropped 0.2 percent to 1,657.19 and the JPX-Nikkei Index 400 shed 0.2 percent to 14,979.39.

(Editing by Eric Meijer)