* Japan stocks remain firmly footed in structural bull market - JPMorgan * Hitachi up on higher operating margin forecast * Nikkei posts 2nd-straight weekly gains By Ayai Tomisawa TOKYO, May 17 The Nikkei share average rose on Friday with investors snapping up reflationary plays such as real estate stocks on the dips - posting a second week of gains supported by the benign effects of a weak yen. Agriculture-related stocks also lifted the market, with Prime Minister Shinzo Abe's second tranche of economic strategy expected to include growth in the farm sector when he speaks on Friday. The benchmark Nikkei gained 0.7 percent to 15,138.12, the highest closing level since December 2007. The index rose to as high as 15,157.32 earlier, the highest intraday level of the period. It gained 3.6 percent in the week. The index reversed from negative territory in the morning as investors bought back reflationary stocks such as real estate firms which were battered early this week when long-term debt yields rose. Market analysts said that many long-only investors have yet to catch up with the steep rises in the Japanese market, which has gained around 45 percent since the beginning of the year, propelled by the government's bold monetary easing and reflation drive. The index has gained 6.7 percent since last Thursday, when the dollar broke above the 100-yen mark. "Investors want to buy Japanese stocks if there is room for buying on the dips because they expect the market to rise higher," said Hikaru Sato, senior technical analyst at Daiwa Securities. Mitsubishi Estate Co gained 3.4 percent and Mitsui Fudosan Co added 2.4 percent. Farm-related stocks also attracted gains from retail investors on speculation that Abe's third economic reform pillar, which is growth strategy, will include bolstering agriculture exports. Agricultural chemical manufacturer Nihon Nohyaku Co surged 16 percent and tractor maker Iseki & Co jumped 17 percent. In the longer term, market players expect a further rise in the Japanese market as the weakening in yen has improved the profit outlook for many Japanese firms. Many exporters have used assumptions of around 90-95 yen to the dollar for the year ending March 2014 - outlooks which now look very conservative as the dollar is trading around 102 yen. "Japanese risk assets - equities and real estate - remain firmly footed in a structural bull market. We maintain our long-standing Topix target of 1,400 by end-2013, and add a new target of 1,800 to be hit by end-2014," wrote Jesper Koll, director of Japan equity research at JPMorgan in a note. "In our view, the powerful combination of relentless monetary stimulus, rising visibility of earnings, and concrete forward-looking corporate investment strategies is only just beginning to build momentum and will be sustained for multiple years." The Topix rose 0.6 percent to 1,253.24 in moderate volume, with 4.40 billion shares changing hands, compared to last month's average daily volume of 4.31 billion shares. But analysts said that due to the steep rises in the market over a short period of time, caution against overbought signs may again trigger a correction in the near term. Blue-chip exporters were mixed, with Panasonic Corp falling 0.7 percent, Toyota Motor Corp gaining 0.3 percent and Nikon Corp sliding 1.2 percent. But Hitachi Ltd rose 3.2 percent after it said that it will expand its global workforce over the next three years, while aiming to boost its annual operating profit margin to more than 7 percent from 4.7 percent.