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* Orix, Toyota advance * Japan Tobacco sinks, sources say govt to launch share sale soon * Nikkei rises 0.7 pct, Topix adds 0.8 pct By Tomo Uetake TOKYO, Feb 20 (Reuters) - Japan's Nikkei average climbed to a 52-month high on Wednesday, buoyed by gains on Wall Street and a softer yen, though analysts said the upside could be limited as investors focus on who will become the next Bank of Japan governor. The Nikkei advanced 0.7 percent to 11,451.33 after trading as much as 11,510.52 earlier, its highest level since October 2008. Toyota Motor Corp rose 1.9 percent after the Nikkei newspaper said the carmaker will ramp up production in Japan in April by about 10 percent on higher-than-expected domestic sales and increased profitability of exports due to a weaker yen. It was the third-most-traded stock by turnover on the main board. Capping the market's gains, Japan Tobacco Inc sank 3.2 percent as the top-weighted loser after sources told Reuters that the Japanese government's $10 billion stake in the world's third-largest tobacco company was expected to kick off within days after bankers met on Tuesday over deal details. The benchmark Nikkei is up 10 percent since the start of this year, spurred by the yen's weakness, after rallying 22.9 percent in 2012. Most of the gains last year came in the final six weeks after Prime Minister Shinzo Abe focused his election campaign on lobbying the BOJ to adopt bolder monetary policy. Takashi Hiroki, chief strategist at Monex Inc, said investors were unlikely to chase the Tokyo market too hard as they would be focused on whom the government will nominate as the next central bank governor next week. The government has delayed nominating a governor by a week, fanning talk of friction between the prime minister and the finance minister over who should run the central bank and take aggressive action to revive the economy. "Lawmakers in Japan have made it very clear that they are comfortable with the yen at 90 to 100 (to the dollar). They probably prefer closer to 100 than 90. They would like the equity market to go higher in the fiscal year end (in March)," a senior trader at a foreign bank said. Japanese equities carry a 12-month forward price-to-earnings ratio of 13.8, a level not seen since March 2011, according to Thomson Reuters Datastream. That compared with a 10-year average of 16.4. The trader said the long-only investors, such as pension funds, remained slow to enter the Japanese market. "I don't think U.S. long-only funds have really got into this market. They are still underweight. I think it's hedge funds and regional accounts that have a little bit more flexibility around their asset allocations, so we are seeing those guys in the market," the trader said. The broader Topix index rose 0.8 percent to 971.66 after trading as high as 1.3 percent. Social gaming company Gree Inc tumbled as much as 7.6 percent after mobile phone operator KDDI Corp said in a filing that it plans to sell 3.4 percent of Gree's outstanding shares. But Orix Corp gained 2.8 percent after the financial services firm said it has agreed to buy Dutch asset manager Robeco from its owner Rabobank in its biggest- ever acquisition. "As of Tuesday, there were more than 40,000 call option orders at 11,500. So when the Nikkei 225 approaches that level, people think the index could face some resistance from the seller side. That adds pressures on the index," said Hiroichi Nishi, an assistant general manager at SMBC Nikko Securities.