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Nikkei hits 1-week high on hopes for progress in U.S. standoff

* Exporters regain ground as yen weakens vs dollar

* Earnings could lift Nikkei above 15,000 later this year -


By Ayai Tomisawa

TOKYO, Oct 10 (Reuters) - The Nikkei share average climbed

to a one-week high on Thursday, buoyed by hopes for progress in

the U.S. fiscal standoff, as President Barack Obama invited

Republicans and Democrats to search for a way to end the

government shutdown and raise the debt limit.

The Nikkei was up 0.8 percent at 14,147.60 in

midmorning trade after rising as high as 14,152.77 earlier, its

highest since Oct. 3. The gain followed a 1 percent rise on


Bellwether exporters were in demand after the dollar rose

against the yen to 97.53, up about a full yen from

two-month low of 96.55 yen hit on Tuesday.

Honda Motor Co gained 1.3 percent, Nissan Motor Co

advanced 1.8 percent and Nikon Corp added 0.5


In the latest Washington developments, Republicans and

Democrats floated the possibility of a short-term increase in

the debt limit to allow time for broader negotiations on the

budget. Obama began inviting lawmakers from both parties to the

White House for meetings to discuss the government shutdown and

raising the debt limit.

"It's a step forward for the market to resume risk-taking,

though we are not too optimistic," said Isao Kubo, an equity

strategist at Nissay Asset Management. "Investors are cautiously

buying back."

The impasse has shut the U.S. government for nine days and

rattled global financial markets with the threat that the

country's $16.7 trillion borrowing limit will not be raised

before an Oct. 17 deadline.

The Nikkei dropped to a five-week low early this week.

Among notable movers, Taiko Pharma soared 4.7

percent after the drugmaker raised its earnings outlook for the

six months ended September.

"Macro long-short funds are active recently. With the

second-quarter earnings announcements just around the corner,

they will likely pick up companies announcing higher forecasts

in the next month or so," said Masanaga Kono, senior strategist

at Amundi Japan. He added that the Nikkei would likely trade

above 15,000 if earnings impress the market.