Nikkei rises 1.3 pct as exporters gain on yen

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By Aiko Hayashi

TOKYO, March 25 (Reuters) - Japan's Nikkei average rose 1.3 percent on Tuesday as Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) and other exporters climbed with the yen trading well off a near 13-year high posted last week against the dollar, easing some concern about exporters' earnings outlooks.

Mitsui & Co (8031.T: Quote, Profile, Research, Stock Buzz) jumped after the Nikkei business daily said the trading house would participate in a power and water desalination project in Qatar. Nippon Steel Corp (5401.T: Quote, Profile, Research, Stock Buzz) rose after the same paper said the steelmaker planned to spend 500 to 600 billion yen ($5 to $6 billion) to build a steel factory in Brazil. [ID:nT331093]

But property stocks such as Mitsui Fudosan (8801.T: Quote, Profile, Research, Stock Buzz) weighed on the overall market after land price data showed property prices rose for a second straight year in 2007, but analysts said the honeymoon is already over with the market hit hard by tighter credit conditions. [ID:nT351756]

"The yen trading above 100 yen (versus the dollar) provides a sense of relief to the market," said Yumi Nishimura, manager of the investment advisory section at Daiwa Securities SMBC.

"But market gains are lacking speed due to a small number of participants and after recent advances in the Japanese market."

Nishimura also said investors could not be certain if the softer yen trend would continue because of lingering signs about a weak dollar.

The benchmark Nikkei .N225 ended the morning session up 166.24 points at 12,646.33. The Nikkei ended flat on Monday, snapping a three-day winning streak.