Nikkei up for 1st session in six, Toyota rebounds

TOKYO, May 16 (Reuters) The Nikkei average rose for the first time in six sessions on Tuesday, gaining 0.12 percent as shares of exporters such as Toyota Motor Corp. rebounded after the yen slipped back against the dollar.

Honda Motor Ltd. gained following a report that the auto maker will build a sixth plant in North America to help meet growing demand.

Investors were betting that Japanese stocks now had room to advance after the Nikkei's drop to a two-month low in the previous session, said Ken Masuda, senior dealer in equities at Shinko Securities.

''Stock prices appear undervalued at current levels -- this market has so far had a tendency to overshoot in either direction,'' he said.

The retreat in the yen also helped spur buying, he said.

The Nikkei was up 19.94 points at 16,506.85 as of 0106 GMT. The TOPIX index was down 0.01 percent at 1,681.67.

The yen was at around 110.50 to the dollar on Tuesday. On Friday it hit an eight-month high of 109.29.

A strong yen is a minus for Japan's exporters as it eats into profits when earnings from abroad are brought home.

Toyota rose for the first time in seven sessions, gaining 1 percent to 6,310 yen.

Honda added 0.9 percent to 7,830 yen. Japan's third-largest auto maker will spend about 50 billion yen (6 million) to build a sixth plant in North America, the Nihon Keizai business daily reported on Tuesday.

A company spokesman declined to comment on the report.

Shares of Urban Corp. were untraded with a surplus of sell orders at 1,201 yen, a 14.3 percent fall from Monday's close, after the real estate firm said it would postpone its earnings announcement due to unfinished auditing.

Goldman Sachs said on Monday it had removed the company from its current investment list, because of uncertainity due to the sudden postponement.

REUTERS PG PM0711