* Yen helps market, but China policy worry remains -analysts
* TDK shines on upgrade, pulls up stocks of other high-techs
By Aiko Hayashi
TOKYO, Jan 21 (Reuters) - Japan's Nikkei average rose 0.9
percent on Thursday, lifted by Advantest Corp <6857.T> and other
tech shares on a stabilising yen, but investor caution on policy
tightening in China capped further gains.
China released a wave of economic data after Tokyo's midday
close including its fourth quarter gross domestic product, which
rose 10.7 percent from a year earlier, compared with market
expectations of 10.9 percent.
Consumer inflation accelerated to 1.9 percent in the 12
months to December from November's 0.6 percent reading. The batch
of data prompted economists to say it was only a matter of time
before Beijing tightened monetary policy further, though the
initial reaction in the stock market was limited. []
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"What the market is watching most closely now is China's
policy stance. It's not tightening yet, but the market tends to
sensitively react to any signs of tightening policy at an early
stage. We're still in that very precarious place," said Masaru
Hamasaki, senior strategist at Toyota Asset Management.
"But once we pass this phase, investors will likely shift
their focus to the strength in the economy and expectations for
solid earnings."
The benchmark Nikkei <> gained 100.58 points to
10,838.07, reversing an early dip, with support solid around
10,600, just above the Nikkei's 25-day moving average.
The broader Topix <> climbed 1.1 percent to 954.76.
The dollar rose 0.4 percent to around 91.57 yen <JPY=>, while
the euro was up 0.3 percent to 129.05 yen <EURJPY=R>. Investors
fret about a stronger yen as it curbs exporters' profits when
they are repatriated.
"The yen's stabilising moves are supporting the market, but
if the yen becomes stronger again, the market could easily lose
ground as concerns about further Chinese tightening steps
remain," said Yutaka Miura, a senior technical analyst at Mizuho
Securities.
On Wednesday, news that China's central bank has ordered at
least two lenders to increase their reserves sparked worries that
China may be moving towards tightening policy and slower growth,
sending the Tokyo market lower.
TDK <6762.T>, which makes parts for hard disk drives, jumped
3.9 percent to 6,070 yen after Citigroup raised its rating on the
company to "buy/high risk", partly citing strong demand for
personal computers and low hard drive inventory levels.
Analysts said the upgrade contributed to a generally upbeat
mood for tech shares.
Chip-tester maker Advantest Corp <6857.T> climbed 3 percent
to 2,582 yen and Sony Corp <6758.T> gained 4.4 percent to 3,195
yen. Nikon <7731.T>, which makes steppers, rose 2 percent to
2,031 yen.
(Editing by Joseph Radford)
