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Nikkei rises 0.9 pct on earnings hopes, Fed policy support

* Hopes Fed tapering will be delayed to next year also

positive - analysts

* All of Topix 33 subsectors in positive territory

* Nikkei could rise towards 18,000 by end of 2014 - fund


By Ayai Tomisawa

TOKYO, Oct 21 (Reuters) - Japan's Nikkei share average rose

above 14,700 for the first time in three weeks, underpinned by a

strong performance on Wall Street and expectations the Federal

Reserve will delay trimming its economic stimulus programme.

After last week's deal by U.S. lawmakers that ended a 16-day

government shutdown, investors have started to speculate that

the Fed will extend its $85 billion-a-month bond-buying stimulus

into next year.

The prospect of the easy money programme being retained for

longer helped drive the Nikkei up 0.9 percent to

14,695.09 in mid-morning trade. It rose as high as 14,727.85

earlier, the highest since Sept. 27.

On Friday, the S&P 500 closed at a record high for the

second straight day helped by stronger-than-expected earnings

from the likes of Google and Morgan Stanley.

The improved earnings had a knock-on effect in Tokyo where

analysts are also anticipating a solid profit season for Japan


Toyota Motor Corp rose 1.0 percent, Panasonic Corp

added 1.8 percent and Canon Inc advanced 0.8


"Investors were reassured by strong earnings and the feeling

that the U.S. economy is resilient raised their appetitive for

risk," said Hikaru Sato, a senior technical analyst at Daiwa


The Topix advanced 0.5 percent to 1,212.07, with all

of its 33 subsectors in positive territory.

Other notable gainers included Suzuki Motor Corp,

which jumped 2.7 percent after the Nikkei reported that the

automaker is likely to have posted an operating profit of about

90 billion yen for the April-September period, up more than 30

percent on year.

Market players said the Nikkei should gain further on

expectations of strong second-quarter earnings and upgrade to

profit forecasts for this fiscal year through March. The

earnings releases will hit the market later this week.

Masayuki Kubota, a senior fund manager at Daiwa SB

Investments, said it may be difficult for the Nikkei to breach

its May high of 15,942.60 this year, but expects the benchmark

to advance a further 20 percent from its current level within

the next 12 months.

"On the assumption that the Nikkei will be bought on

expectations that it will trade 15 times its projected earnings

for the next fiscal year (through March 2015), I think it could

rise towards 18,000 by the end of next year."

The benchmark index is up 41 percent so far this year,

buoyed by the Japanese government's aggressive monetary and

fiscal stimulus policies.