Nikkei gains on Wall St rally, investors cautious ahead of earnings

* Nikkei up 0.7 pct, but still below previous day's high * Investors look to earning reports * Some buying low P/E names such as Bridgestone gain * Seibu Holdings open steady at IPO prices By Hideyuki Sano TOKYO, April 23 (Reuters) - Japanese stocks rose on Wednesday morning, spurred by Wall Street gains on solid earnings and merger activity, but buying was tempered as investors were wary of the looming local reporting season.

The Nikkei rose 0.7 percent to 14,495.44, erasing its losses on the previous day. However, it remains well below Monday's two-week high of 14,649.50.

The benchmark has been largely stuck between 14,000 and 15,200 for nearly three months, underperforming many of its peers, partly on disappointment over the absence fresh monetary stimulus and worries that Japan's economy may be knocked hard by this month's sales tax hike.

The market took its cue from Wall Street, where a host of solid earnings reports and strength in the healthcare sector lifted the S&P 500 and Nasdaq to their sixth straight advance.

A largely in-line Chinese manufacturing survey also helped to retain the underlying positive mood.

Shares in railway and property company Seibu Holdings Inc opened in line with its deeply discounted IPO price on its relisting in Tokyo, reflecting foreign investors' growing caution over the strength of Japan's economic recovery.

Seibu opened at 1,600 yen on Wednesday after being delisted 10 years ago due to a scandal involving falsified shareholder records, faring better than recent IPOs, where share prices fall sharply from the initial offering prices.

Resona Bank, a company considered cheap on valuation, rose 2.9 percent. Non-bank money lenders also ouperformed in the morning, with Aiful rising 6.5 percent and Acom 5.7 percent.

Among exporters, Mazda rose 2.2 percent.

Investors are hoping for Japan's corporate earnings season to provide a catalyst for the Nikkei, with traders noting the relatively inexpensive stock valuation at present.

Rubber products makers provide an example of a sector with attractive valuations. They were the top performer among the Tokyo Stock Exchange's 33 industry subindexes on Wednesday morning, with industry leader Bridgestone rising 2.1 percent.

"Bridgestone is a typical example of a company with low P/E. Buying in other names with relatively low P/E could spread," said Takashi Hiroki, chief strategist at Monex Securities.

Bridgestone, which rose almost four percent in the past five sessions compared to 0.4 percent in the Nikkei, still trades around 10 times its earnings.

A large number of Japanese companies will announce their guidance for their financial year to March 2015 in coming weeks.

Later in the week, companies such as Shin-estu Chemical , Hitachi Construction, Fanuc and Denso announce their earnings.

The broader Topix rose 0.7 percent to 1,170.19 while the new JPX-Nikkei Index 400 gained 0.7 percent to 10,649.75.

(Reporting by Hideyuki Sano; Editing by Shri Navaratnam)