* Nikkei hits fresh 7-mth intraday high of 10,394.22
* Resource-linked, bank, property shares rise
* But strong follow-up buying limited ahead of holiday
By Antoni Slodkowski and Chikafumi Hodo
TOKYO, Dec 22 (Reuters) - Japan's Nikkei average rose to a fresh seven-month high on Wednesday, reflecting general bullishness in global equities markets, but the market lacked energy to extend gains ahead of holidays.
Strength in resource-related stocks in the wake of a rally in commodity prices and inflows into domestic demand-led shares, such as banks and real estate, bolstered overall sentiment to draw steady bargain-hunting, traders said.
But investors turned reluctant to chase Tokyo shares too strongly or to hold on to large buy positions ahead of a public holiday in Japan on Thursday and holidays in overseas markets this week and next.
"Sentiment is being lifted by rises in domestic demand-led stocks like banks, along with gains in resource-related shares, but the market turned somewhat cautious as the Nikkei approached 10,420.74," said Takashi Ohba, a senior strategist at Okasan Securities.
That is where futures and options contracts expiring in December settled earlier this month. It is being closely watched by market participants as an important technical point.
The benchmark Nikkei ended the morning session up 0.1 percent or 5.95 points at 10,376.48, after touching a fresh seven-month high of 10,394.22.
The broader Topix index rose 0.2 percent to 908.25.
"The Nikkei was undermined by falls in some exporter shares at the start, but at the same time trading houses were strong due to strong rises in commodities prices," said Kazuhiro Takahashi, general manager at Daiwa Capital Markets.
"The market will be cautious about buying too strongly ahead of the market holiday," he said.
The Nikkei hovered in a narrow range throughout the morning as the market saw a mixed bag of factors driving the market in thin conditions with many foreign investors away for year-end holidays, traders said.
Although volume on the Tokyo Stock Exchange's first section picked up from the last two sessions, it was still slightly below 1 billion shares by midday.
Declines in the euro the previous day due to concerns over debt problems in the euro zone weighed on shares of companies with close business ties to Europe, such as precision machinery makers. The sector's subindex fell 0.5 percent.
But trading houses and other resource-related shares advanced after U.S. crude futures rose above $90 per barrel, the highest intraday price in two weeks.
Among trading companies, Marubeni rose 1.8 percent to 582 yen and Mitsui Co Ltd rose 1.4 percent to 1,334 yen.
Shares of domestic demand-led companies advanced. Banks subindex rose 1.1 percent and real estate added 2.7 percent.
Elsewhere, shares in Ulvac Inc rose 3 percent to 2,138 yen after its president told Reuters on Tuesday that demand for gear used in making small and next-generation OLED display panels for smartphones is strong, making up for a fall in demand for large liquid-crystal display equipment.
Canon Inc gained 2.2 percent to 4,275 yen after the Nikkei business daily said the camera maker is likely to beat its operating profit forecast for its financial year ending this month thanks to strong demand for high-end cameras.
Operating profit is likely to rise 84 percent from the previous year to about 400 billion yen ($4.78 billion), higher than Canon's forecast of 390 billion yen, the Nikkei reported. ($1=83.73 Yen) (Editing by Michael Watson)