Nikkei hits six-year high on earnings hopes

TOKYO, Jan 25 (Reuters) The Nikkei share average hit its highest in more than six years on Thursday as technology firms such as Sony Corp. gained on expectations of higher profit forecasts, while shippers and steel makers continued their recent advance.

Shares in Ricoh Co., which makes office equipment, rose after a report it would buy IBM's digital commercial printer operations for about 0 million.

''The price of oil has fallen and the yen is relatively weak. As such, investors have increasingly strong expectations that companies will raise their profit forecasts for the next fiscal year,'' said Takahiko Murai, general manager of equities at Nozomi Securities.

''Foreign investors are returning to Japanese stocks,'' he said. ''In addition, a rebound in the start-up markets is bringing back retail investors. I think we can begin to expect a more active stock market.'' The Nikkei was up 0.45 percent at 17,585.84 as of 0059 GMT, having earlier hit 17,617.64, its highest since July 2000.

The broader TOPIX was up 0.43 percent at 1,746.05.

Sony rose 2.1 percent to 5,750 yen, due in part to expectations the yen's recent fall to a four-year low will help boost profits from overseas sales.

Shippers and steel makers continued to be a focus for the market.

Kawasaki Kisen Kaisha Ltd., Japan's third-largest shipping firm, gained 2.8 percent to 1,070 yen.

Brokerage Mizuho Securities said on Wednesday Japan's three largest shipping firms could announce optimistic forecasts for charter shipping rates in February.

Nippon Steel Corp., gained 1.3 percent to 701 yen, helped by continuing expectations of consolidation in the steel industry.

Ricoh rose 3.7 percent to 2,505 yen after the Nikkei business daily said it would buy IBM's digital commercial printer operations in April, which would make the Japanese firm the No.1 player in that growing market.

REUTERS PDS RN0739