* Nikkei rises 0.5 pct, Topix up 0.4 pct * Exporters rebound as yen reverses gains to trade lower vs dollar * 7-Eleven parent up 1.7 pct after Q3 profit gains By Dominic Lau TOKYO, Jan 9 (Reuters) - Japan's Nikkei average reversed earlier losses to trade higher on Wednesday, as a halt in the yen rebound prompted investors to buy shares of currency-sensitive exporters. The Nikkei has rallied nearly 22 percent over the past two months, led by exporters as the yen weakened after new Prime Minister Shinzo Abe called on the central bank to adopt an aggressive monetary policy to energise the ailing economy, including setting an inflation target of 2 percent. The Bank of Japan will consider easing monetary policy again this month as it eyes doubling its inflation target, sources told Reuters, as weakness in the economy threatens to delay the country in getting out of deflation. Any easing will likely take the form of another increase in the BOJ's 101 trillion yen ($1.2 trillion) asset buying and lending programme, mostly for purchases of government bonds and treasury discount bills, sources familiar with its thinking say. The Nikkei gained 0.5 percent to 10,559.24 by the midday break on Wednesday, breaching above its five-day moving average at 10,549.92, after trading as low as 10,398.61 earlier in the session. Wednesday's gain took the Nikkei's 14-day relative strength index to 74.1, above the 70-mark which is considered overbought and often signals a near-term pull back. "It's because of forex, totally. 100 percent," said Kenichi Hirano, market analyst at Tachibana Securities, referring to the rebound in the Nikkei. "As FX is traded in tight range, the Nikkei average is likely to be traded in range, probably around 10,500." The yen was down 0.5 percent at 87.455 to the dollar on Wednesday after rising 0.9 percent in the previous session, its second day of gains. Exporters reversing early losses included Toyota Motor Corp , Honda Motor Co, Nikon Corp and Daikin Industries, up between 0.6 and 1.4 percent. But Canon Inc and Panasonic Corp remained weak, down 1.8 and 1.4 percent respectively. The rally in Japanese equities has pushed up their valuations, with the 12-month forward price-to-earnings ratio to 13, ahead of the U.S. S&P 500's 12.7 and the pan-European STOXX Europe 600's 11.5, according to Thomson Reuters Datastream. Japan's broader Topix rose 0.4 percent to 875.66 in active trade on Wednesday morning, with volume hitting its full daily average for the past 90 trading days. Other notable gainers included Seven & I Holdings Co , which advanced 1.7 percent after its quarterly operating profit rose 4.8 percent as higher profits from its core 7-Eleven stores were supported by stronger income figures at other retail formats.