Nikkei above 17,000 as blue chips gain on cheap yen

TOKYO, Dec 21 (Reuters) The Nikkei share average rose 0.4 percent to remain above 17,000 on Thursday, extending gains into a second session as investors picked up blue chips such as Honda Motor Co.

Ltd. due to a softer yen.

But shares of Sanyo Shinpan Finance Co. Ltd. dropped 5.8 percent to 3,250 yen after Japan's financial regulator slapped the consumer lender with a record 12-day business suspension on Wednesday, finding that employees falsified documents related to legal disputes with borrowers. ''Investors are trading on expectations that corporate earnings for the October-December quarter will likely be solid and that companies may revise up the full-year forecasts, which they didn't do after the first-half earnings announcements,'' said Tatsuyuki Kawasaki, director of equities trading division at Kaneyama Securities.

''It (the Nikkei) won't easily reach the 18,000 level, however. For that, investors will have to see the earnings results.'' The Nikkei was up 75.69 points at 17,086.73 as of 0142 GMT, topping the day-high in the previous session of 17,050.73. The broader TOPIX index rose 0.42 percent to 1,673.98.

The yen was around 118.42 yen to the dollar in early Asian trading. A softer yen is a boon to companies that make the bulk of their sales abroad because it boosts profits when earnings from abroad are brought home.

Honda was up 1.6 percent at 4,490 yen, while industrial robot maker Fanuc Ltd. added 1.1 percent to 11,440 yen.

Also in focus were Nissan Motor Co. Ltd. and NEC Corp. Shares in Nissan rose 1.1 percent to 1,443 yen, while NEC fell 0.4 percent to 573 yen after a paper reported on Thursday the companies would tie up to develop lithium ion batteries used in hybrid and fuel-cell cars.

The move came as the two companies aim to catch up with the rival team of Matsushita Electric Industrial Co. Ltd. and Toyota Motor Corp., the paper said.

Nissan, which trails Toyota in the development of fuel-efficient vehicles, is likely to take less than a 50 percent stake in the new joint venture, the paper said.

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