* Short-term correction may be possible - analyst
* Strong July-Sept earnings may lift market in a few weeks -
By Ayai Tomisawa
TOKYO, Oct 17 (Reuters) - Japan's Nikkei share average
extended gains into a seventh day and hit a three-week high on
Thursday after U.S. President Barack Obama said he would sign
legislation to reopen the government and avert a debt default as
soon as it reaches the White House.
The Nikkei was up 1.1 percent at 14,622.76 in
midmorning trade after hitting 14,664.22 earlier, its highest
since Sept. 27. The index traded above 14,606.66, a 61.8 percent
retracement of its May high to its June low.
"Investors seem excited as what was hanging over their heads
will finally be lifted," said Yoshiyuki Kondo, an analyst at
But he added that since the Nikkei has added 613 points, or
4.4 percent, over the past six sessions, there may be a
short-term correction in the market.
"The rises have been too sharp over a short period of time,"
On Wednesday, U.S. Senate leaders hammered out an agreement
to break the fiscal impasse late on Wednesday, paving the way
for U.S. lawmakers to end the drama in Washington just hours
before the government exhausts its borrowing authority.
The Senate has passed the deal and sent the measure to the
House of Representatives for final passage, before Obama signs
it into law.
Exporters rose as the dollar gained 0.2 percent against the
yen to 98.96, with Toyota Motor Corp rising 0.8
percent, Honda Motor Co adding 1 percent and Sony Corp
advancing 0.9 percent.
Kansai Electric Power Co surged 4.6 percent after
the utility revised up its April-September earnings forecast due
to higher-than-expected revenue from air-conditioner usage in
the hot summer. It now expects an operating profit of 54 billion
yen ($546 million) for the six months compared with its initial
forecast for an operating loss of 20 billion yen.
Despite the possibility of a short-term correction, some
analysts said the Nikkei may trade above 15,000 in a few weeks.
Jun Yunoki, a strategist at Nomura Securities, said that
after the long-stalled U.S. debt ceiling problem is resolved,
the announcement from late October of Japanese companies'
second-quarter results could herald a considerable improvement
in market sentiment.
"We are expecting about a 50-60 percent rise on year in
companies' recurring profits for the second quarter. We are
bullish for the Japanese market through the end of the year," he