* Advantest, other exporters lead Nikkei higher
* Kawasaki Heavy, train makers surge on Vietnam train report
* Trend is upwards, but investors remain cautious
By Elaine Lies
TOKYO, Aug 13 (Reuters) - Japan's Nikkei stock average edged up 1 percent on Thursday on relief after the Federal Reserve suggested the U.S. economy is through the worst of the recession, with economy-sensitive exporters such as Advantest Corp leading it higher. In thin trade, investors sought out individual shares related to specific themes, with Kawasaki Heavy and other companies involved in making trains surging on a report that Vietnam will use Japan's bullet train technology in building its high-speed railway system.
Analysts said the market welcomed few surprises in the Fed's closely watched exit strategy, in which it will continue to stick to its current measures, but that investors remain a bit wary.
"The Fed's view on the economy has become markedly stronger and basically the results satisfied both the bond and the stock markets," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.
"But even though there's improvements in aspects of the U.S. economy and stock markets are getting stronger, they're still a lot lower than they were a year ago and people are worrying about overvaluation."
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 rose 104.21 points to 10,539.21, edging back towards a 10-month high hit on Tuesday, with gains in Hong Kong shares providing an additional boost in afternoon trade.
The broader Topix rose 1 percent to 969.03. With the long-awaited Fed meeting and a slew of Chinese indicators out of the way, analysts said that eyes are now on Monday's announcement of second quarter Japanese gross domestic product data and Japan's August 30 election.
"While certain sectors are likely to rise before the election on expectations, the market as a whole is wary about economic policies since there are questions about how both major parties will fund their proposed programmes," said Yumi Nishimura, deputy general manager at the investment advisory section of Daiwa Securities SMBC. Kawasaki Heavy, which makes railway rolling stock, shot up 6.9 percent to 263 yen, while another rolling stock maker Nippon Sharyo Ltd jumped 8 percent to 647 yen. Kinki Sharyo Co climbed 8.2 percent to 909 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.
High-tech exporters rose, with chip-tester maker Advantest Corp climbing 5.4 percent to 2,360 yen and electronics parts maker Kyocera Corp adding 2.1 percent to 7,800 yen.
Shares of Honda Motor Co advanced 1.6 percent to 3,090 yen and Toyota Motor Corp rose 1.7 percent to 4,100 yen.
Mazda Motor Corp gained 3.1 percent to 264 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. (Reporting by Elaine Lies; Editing by Joseph Radford)