Nikkei above 18,000, first time in nearly 7 years

TOKYO, Feb 22 (Reuters) The Nikkei average rose 0.83 percent to top 18,000 for the first time in nearly seven years on Thursday, with exporters such as Canon Inc. rising on a soft yen after the central bank raised interest rates but said further increases would be gradual.

Small steel firm Tokyo Kohtetsu Co. was up 1.3 percent, shedding some of its earlier gains. Trading in the stock was suspended after its shareholders rejected a proposed share swap between the company and Osaka Steel Co.

Shares of Sumitomo Metal Mining Co., which jumped on higher gold prices, extended gains after the company told Reuters that it would upgrade its earnings estimate, while property stocks gained ground on relief buying that rate rises would be slow.

''Investors were concerned about the foreign exchange moves following the rate hike but the yen has turned softer, giving relief,'' said Susumu Abe, manager at information and investment department at Mito Securities Co.

The Nikkei gained 148.93 points to 18,062.14 as of 0455 GMT, a level last seen in May 2000. On Wednesday the technology-laced benchmark shed 0.14 percent to 17,913.21.

The broader TOPIX index rose 0.62 percent to 1,798.24.

Abe expects the Nikkei to climb as high as to 18,600 in the near term but the market needs proof on earnings growth for the next fiscal year to move beyond that level.

Katsuhiko Kodama, a senior strategist at Toyo Securities, said investors are likely to keep picking up shares of steel firms on expected industry consolidation and as they are seen as still having room to rise.

''The Nikkei could aim for around 19,000 towards April, boosted by possible upward revisions of corporate earnings,'' he said.

Canon, a maker of digital camera and PC printers which generates about three quarters of sales overseas, rose 1.9 percent to 6,590 yen after the yen dipped against the dollar and tumbled to a record low against the euro on Thursday.

TDK Corp. advanced 1.8 percent to 10,240 yen and Tabuchi Electric Co. Ltd. was glutted with buy orders coming at 234 yen, up 27.2 percent from Wednesday's close.

Electronics parts maker TDK said on Wednesday it would spend about million to take a minority stake in parts maker Tabuchi Electric to help expand its power unit business.

In the property sector, Sumitomo Realty&Development Co.

Ltd. jumped 4.1 percent and Mitsubishi Estate Co. Ltd. gained 3 percent.

Yumi Nishimura, manager of investment advisory section at Daiwa Securities SMBC Co. Ltd., said investors are buying property stocks ahead of government land price data due in March.

Resource-related stocks advanced after gold rallied to a nine-month high the previous day and other commodity prices also rose. Mitsubishi Materials Corp. was up 3.5 percent.

REUTERS CS DB1129