TOKYO, Aug 23 (Reuters) - Japan's Nikkei share average on Wednesday rose for a third straight session, as investors scooped up technology stocks following their decline on concerns around U.S. interest rates.

The Nikkei rose 0.48% to end at 32,010.26, its highest close since Aug. 15, reversing early losses. The broader Topix ended 0.5% higher at 2,277.05.

"Investors bought back stocks after declines in the Nikkei this month," said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

"Particularly they bought back technology stocks with high price/earnings ratio, which had been sold amid concerns about rising U.S. Treasury yields."

The benchmark U.S. 10-year yield scaled a 16-year high this week, as a run of strong U.S. economic data raised concerns that the U.S. Federal Reserve could lay the foundations for higher-for-longer rates at the Jackson Hole summit this week.

The Nikkei has fallen 3.5% so far this month, and is on track to end five consecutive months of gains.

Barcode scanner maker Keyence jumped 2%, while air conditioning maker Daikin Industries advanced 2.76%.

Central Japan Railway, which runs bullet trains between Tokyo and Osaka, advanced 2.23% after the railway firm conducted a stock split.

Chip-making equipment maker Tokyo Electron lost 0.59% to weigh on the Nikkei the most. Technology start-up investor SoftBank Group lost 0.86%.

The banking index slipped 0.32%, tracking a fall in the U.S. financial sector after an S&P downgrade of credit ratings of multiple regional U.S. lenders.

Shibaura Mechatronics slipped 9.84% after the semiconductor-making equipment maker said its top shareholders, including Toshiba, would sell its shares in the market. (Reporting by Junko Fujita; Editing by Subhranshu Sahu and Varun H K)