* Fed's view on economy, exit strategy provide relief
* Kawasaki Heavy surges on Vietnam bullet train report
* Market trend upward but investors still cautious
TOKYO, Aug 13 (Reuters) - Japan's Nikkei average rose 0.8 percent on Thursday, lifted by exporters such as Advantest Corp, with investors relieved after the Federal Reserve suggested the U.S. economy is through the worst of the recession.
Kawasaki Heavy, which makes railway rolling stock, surged 6.5 percent on a report that Vietnam will use Japan's bullet train technology in building its high-speed railway system.
Market players said the market welcomed few surprises in the Fed's closely watched exit strategy, in which it will continue to stick to the current measures, but added that trade remained cautious.
"Market sentiment has warmed up but it is not as if investors are gung-ho bullish. They are still a bit jittery," said Junichi Misawa, senior fund manager at STB Asset Management.
"Stocks appear to be overvalued considering the current level of corporate earnings but I believe that sentiment as it is right now is indicative of a long-lasting run-up."
The Fed said the economy was levelling out, and it left interest rates unchanged at the end of its two-day policy meeting on Wednesday.
It also said it would extend by one month through October the duration of a programme to buy long-term government securities but would not increase the amount of purchases.
The benchmark Nikkei added 84.19 points to 10,519.19. It slipped 1.4 percent the previous day after rising to a 10-month high of 10,587.36 on Tuesday.
The broader Topix rose 0.7 percent to 967.00.
High-tech exporters rose, with chip-tester maker Advantest Corp climbing 3.4 percent to 2,315 yen and electronics parts maker Kyocera Corp adding 1.7 percent to 7,770 yen.
Shares of Honda Motor Co advanced 1.6 percent to 3,090 yen and Toyota Motor Corp rose 1.2 percent to 4,080 yen.
Mazda Motor Corp gained 2 percent to 261 yen after the Nikkei business daily said the automaker could raise its domestic production outlook for April-September by about 10 percent as stimulus programmes in Japan and abroad boost demand.
Kawasaki Heavy shot up to 262 yen. Analysts have said Japan's near-half century experience with its bullet train system puts the country's firms in a strong position to win orders in a global railway investment boom. (Reporting by Aiko Hayashi; Editing by Edwina Gibbs)