Nikkei gains 0.7 pct on exporters, relief after Fed

                                
 * Fed's view on economy, exit strategy provide relief
                                
 * Kawasaki Heavy, train makers surge on Vietnam train report
                                
 * Market trend upward but investors still cautious
                                
 By Aiko Hayashi
                                
 TOKYO, Aug 13 (Reuters) - Japan's Nikkei average rose 0.7
percent on Thursday, lifted by exporters such as Advantest Corp
<6857.T>, with investors relieved after the Federal Reserve
suggested the U.S. economy is through the worst of the recession.
                                
 Kawasaki Heavy <7012.T>, which makes railway rolling stock,
and other companies involved in making trains surged on a report
that Vietnam will use Japan's bullet train technology in building
its high-speed railway system.
                                
 Market players said the market welcomed few surprises in the
Fed's closely watched exit strategy, in which it will continue to
stick to its current measures, but added that trade remained
cautious.
                                
 "Market sentiment has warmed up but it is not as if investors
are gung-ho bullish. They are still a bit jittery," said Junichi
Misawa, senior fund manager at STB Asset Management.
                                
 "Stocks appear to be overvalued considering the current level
of corporate earnings but I believe that sentiment as it is right
now is indicative of a long-lasting run-up."
                                
 The Fed said the economy was levelling out, and it left
interest rates unchanged at the end of its two-day policy meeting
on Wednesday.
                                
 It also said it would extend by one month through October the
duration of a programme to buy long-term government securities
but would not increase the amount of purchases. [ID:nN1272730]
                                
 In thin trade, the benchmark Nikkei <.N225> added 76.14
points to 10,511.14. It slipped 1.4 percent the previous day
after rising to a 10-month high of 10,587.36 on Tuesday.
                                
 The broader Topix <.TOPX> rose 0.7 percent to 966.73.
                                
 Analysts said the market will be watching moves in Chinese
stocks <.SSEC> after the Nikkei sped up its losses the previous
day, tracking a fall in China on deepening worries about a
possible tightening of market liquidity.
                                
 KAWASAKI HEAVY, TRAIN MAKERS JUMP
                                
 Kawasaki Heavy shot up 6.1 percent to 261 yen, while another
rolling stock maker Nippon Sharyo Ltd <7102.T> jumped 5 percent
to 629 yen. Kinki Sharyo Co <7122.T> climbed 6.6 percent to 895
yen.
                                
 Analysts have said Japan's near-half century experience with
its bullet train system puts the country's firms in a strong
position to win orders in a global railway investment boom.
                                
 High-tech exporters rose, with chip-tester maker Advantest
Corp climbing 4.5 percent to 2,340 yen and electronics parts
maker Kyocera Corp <6971.T> adding 2.2 percent to 7,810 yen.
                                
 Shares of Honda Motor Co <7267.T> advanced 1.6 percent to
3,090 yen and Toyota Motor Corp <7203.T> rose 1.2 percent to
4,080 yen.
                                
 Mazda Motor Corp <7261.T> gained 2.3 percent to 262 yen after
the Nikkei business daily said the automaker could raise its
domestic production outlook for April-September by about 10
percent as stimulus programmes in Japan and abroad boost demand.
[ID:nBNG512955]
                                
 Some 870 million shares changed hands on the Tokyo exchange's
first section, below last week's morning average of 962 million.
                                
 Advancing stocks beat declining ones by more than 3 to 1.
 (Editing by Edwina Gibbs and Joseph Radford)