Nikkei rises 0.7 percent, near 2 week high

TOKYO, Nov 30 (Reuters) The Nikkei share average rose 0.7 percent on Thursday to trade at its highest in nearly 2 weeks as investors bought Honda Motor Co. and other exporters on upbeat U.S. growth data and a weaker yen.

The Nikkei was adding to a 1.4 percent rally in the previous session when a surprise gain in industrial output for October brightened the market's view on the Japanese economy.

''The Nikkei is up mainly due to solid U.S. stocks and the yen. The better-than-expected industrial output data yesterday has also reduced market concerns over the outlook of the economy,'' said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.

As of 0121 GMT, the Nikkei was up 119.63 points at 16,195.83 while the broader TOPIX index rose 0.9 percent to 1,594.42.

Honda rose 1.5 percent to 4,070 yen after data on Wednesday showed that the U.S. economy expanded at a 2.2 percent annual rate during the third quarter, faster than first estimated. The data also helped keep the dollar about one yen above a three-month low of 115.40 yen hit earlier this week.

Higher oil prices encouraged investors to buy energy stocks such as INPEX Holdings Inc., which was up 1.73 percent at 998,000 yen.

Nippon Steel Corp. gained 1.6 percent to 514 yen after business daily Nihon Keizai Shimbun quoted the chairwoman of Baosteel Group Corp. as saying China's top steelmaker may ask Nippon Steel to form a capital tie-up.

Investors sold defensive stocks amid the market rally, with drugmaker Eisai Co. Ltd. falling 1.3 percent to 6,150 yen, and Japan Tobacco Inc. giving up 1.2 percent to 513,000 yen.

REUTERS SBA BST0725