Nikkei hits 4-month high after data; exporters gain

                                
 * Market remains on solid footing - strategist
                                
 * Stable currency moves help exporter shares
                                
 * Japan industrial output stronger than expected
                                
 By Aiko Hayashi
                                
 TOKYO, Dec 28 (Reuters) - Japan's Nikkei average rose to its
highest in four months on Monday as exporters climbed helped by
stable currency moves, while Takashimaya Co <8233.T> gained after
the department store chain kept its full-year profit forecast
unchanged.
                                
 Adding to the upbeat mood, data before the start of trade
showed Japan's industrial output rose a more-than-expected 2.6
percent in November, the strongest gain in six months as rising
exports to Asia bode well for a recovering economy. [JPIP1=ECI]
[ID:nTKU105779]
                                
 "Investor confidence that the market continues to stand on a
strong footing is spreading as the slight fall on Friday was
mainly due to a lack of foreign investors who were on holiday,"
said Tsuyoshi Segawa, equity strategist at Mizuho Securities.
                                
 The benchmark Nikkei slipped 0.4 percent on Friday, a day
after hitting a three-month closing peak, but it ended up 3.5
percent on the week and has risen nearly 20 percent so far this
year.
                                
 "The industrial output data was stronger than what the market
had expected and that's reinforcing the positive sentiment. The
stable dollar/yen moves are also making it easier to pick up
exporter shares," Segawa said.
                                
 The benchmark Nikkei <.N225> was up 1.1 percent at 10,613.05
by midmorning, after earlier climbing as high as 10,627.14, its
highest since Aug. 31.
                                
 The broader Topix <.TOPX> added 0.9 percent to 917.17.
                                
 U.S. and European stock markets were closed on Friday for
Christmas.
                                
 Japan approved on Friday a record budget for next year that
will inflate the country's already huge debt by $484 billion.
                                
 The government, which has vowed to reorient spending to
households, is spending more on welfare and and education but
cutting outlays on public works -- a traditional way for Japanese
governments to boost the economy -- by a record 18 percent.
[ID:nTKV006323]
                                
 Market analysts said that these policies had been seen as
positive for stocks related to children such as Pigeon Corp
<7956.T>, a maker of baby care products, and negative for
construction firms and general contractors, but that this had
been already factored in since the Democratic Party took power
this autumn.
                                
 EXPORTERS LEAD
                                
 The dollar rose against the yen and was trading around 91.70
yen <JPY=>. Investors cheer a weaker yen as it boosts exporters'
overseas profits when they are repatriated.
                                
 Tokyo Electron Ltd <8035.T>, the world's No.2 semiconductor
equipment maker, gained 2.2 percent to 6,010 yen and electronics
parts maker Kyocera Corp <6971.T> advanced 1.2 percent to 8,270
yen. Honda Motor Co <7267.T> climbed 1.6 percent to 3,150 yen.
                                
 Shares of Takashimaya added 1.5 percent to 598 yen after
Japan's third-largest department store chain kept its full-year
profit forecast unchanged on Friday despite a sharp slide in
sales, saying extra cost-cutting would make up for the shortfall.
[ID:nTOE5BN083]
                                
 Shares of Skymark Airlines <9204.T> rose 1 percent to 396 yen
after a source told Reuters that Japan's biggest budget carrier
is ready to introduce seven more Boeing <BA.N> 737-800 planes to
its fleet if it can get 20 more landing slots at Tokyo's Haneda
airport. [ID:nTOE5BO03D]
 (Editing by Chris Gallagher)