Nikkei rises to 5-month highs, exporters gain on strong US data

TOKYO (Reuters) - Tokyo's Nikkei share average rose to a five-month peak on Wednesday morning after Wall Street scored record-closing highs thanks to strong manufacturing activity in the United States, Japan's biggest export market.

Exporters were stronger after the dollar edged up to 101.54 yen from Tuesday's low of 101.29 yen.

The Nikkei rose 0.5 per cent to 15,400.79 in mid-morning trade after hitting as high as 15,444.63 earlier, the best level since January 24.

The Dow and S&P 500 both surged to record closing highs, underpinned in part after financial data firm Markit said its final U.S. Manufacturing Purchasing Managers Index rose to 57.3 in June, the highest since May 2010.

"The market feels confident after the strong US economic data," said Masashi Oda, chief investment officer at Sumitomo Mitsui Trust Bank, adding that Japanese shares are likely to continue rising in the next few months as their valuations are attractive.

Oda said that optimism about the health of the global economy also bolstered sentiment, with investors lapping up positive data from Asia including Tuesday's China purchasing managers' index for June and strong manufacturing in Japan.

"People are now focused on April-June earnings. If the results are strong, they are likely to chase the marker higher on top of cheap valuations of Japanese shares," he said.

Japanese shares are trading at 14 times their earnings 12 months from now compared to U.S. shares at 15.5 times and European shares at 14.1, according to data provided by Nomura Securities.

Exporters attracted strong interest. Toyota Motor gained 0.6 per cent, Nissan Motor advanced 1.0 per cent and Sony added 1.1 per cent.

Consumer finance shares soared on hopes that the government may ease up on rules in order to help small businesses access the cash they need.

Aiful jumped 10 percent to a 14-month high of 700 yen and was the most traded stock by turnover, while Acom soared 6.8 per cent.

The broader Topix gained 0.5 per cent to 1,282.56, and the JPX-Nikkei Index 400 added 0.5 per cent to 11,653.68.