Nikkei up as Japan Tobacco, exporters gain

TOKYO, Dec 7 (Reuters) The Nikkei average rose 0.55 per cent on Thursday as investors bought shares in Kyocera Corp. and Canon Inc. after the yen gave up some gains against the dollar, easing concern over exporters' earnings outlook.

Japan Tobacco Inc. advanced after British firm Gallaher Group Plc said on Wednesday it had received an approach that might lead to an offer for the group, and sources close to the matter said the approach was likely from JT.

''The outlook for Japan's economy is solid and foreigners have returned to Japanese stocks,'' said Tsuyoshi Nomaguchi, a strategist on Japanese equity research at Daiwa Securities.

''But the market may move irregularly in the afternoon ahead of special quotations (SQ), though that effect is temporary.'' Special quotations for the settlement of December futures and options contracts will be announced on Friday.

The Nikkei was up 90.61 points at 16,461.89 as of 0101 GMT while the broader TOPIX index rose 0.16 percent to 1,617.81.

Canon rose 2.9 percent to 6,330 yen.

The dollar was at 115.25 yen up from a one-month low of 114.43 yen struck on Tuesday.

Kyocera gained 2.4 percent to 10,560 yen and Honda Motor Co.

Ltd. added 1 percent to 4,060 yen.

Japan Tobacco jumped 5.9 percent at 535,000 yen.

Japanese chip maker Elpida Memory Inc. inched up 0.5 percent to 5,670 yen after business daily Nihon Keizai said the company would build a new DRAM factory in Taiwan.

It will either invest 800 billion yen (.9 billion) if it goes it alone or spend with partner Powerchip Semiconductor Corp.

a combined total of up to 1.6 trillion yen (.9 billion), the paper said.

Elpida said it will hold a briefing on chip expansion at 3:30 p.m. (0630 GMT).

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