* Domestic-oriented shares outperform
* Strong yen pressures auto sector
By Ayai Tomisawa
TOKYO, June 20 (Reuters) - Japan's Nikkei rose on Thursday
and hovered at six-week highs after the U.S. Federal Reserve
signalled it was ready to cut interest rates to support the
economy, but gains were gapped by a stronger yen.
The Nikkei share average .N225 rose 0.5% to 21,442.94
points by midmorning, after it climbed 1.7% on Wednesday.
The Fed said that it was ready to battle growing global and
domestic economic risks, with rate cuts possibly as early as
next month. "The dovish Fed message is supporting sentiment and the
market is relieved for now," said Takashi Ito, an equity market
strategist at Nomura Securities.
But Ito added that for Japan, a stronger yen would limit the
upside. A stronger yen erodes Japanese manufacturers' profits
made abroad when repatriated.
The dollar dropped more than 0.3% to brush 107.720 yen
JPY= , its lowest since Jan. 4.
With the stronger yen hitting exporters, domestic-oriented
sectors attracted buying. Real estate shares surged, with Mitsui
Fudosan 8801.T surging 1.9% and Mitsubishi Estate 8802.T
soaring 2.3%.
Shippers rallied, after the Baltic dry index .BADI , or
freight charges, jumped 3.9%. Mitsui OSK Lines 9104.T surged
2%.
The auto sector underperformed, with Toyota Motor Corp
7203.T shedding 0.5%, Honda Motor Co 7267.T dropping 1.3%
and Mazda Motor Corp 7261.T sliding 1.4%.
Elsewhere, pharmaceutical company Iwaki & Co 8095.T jumped
7.1% after it raised its net profit forecast to 870 million yen
from 650 million yen for the six-month period ended May 2019.
The broader Topix .TOPX gained 0.3% to 1,560.
(Editing by Kim Coghill)