* China inflation data offers relief
* Foreign investor buying cited
* Attractive valuations supporting Nikkei
* Tepco soars, compensation scheme gets cabinet OK
By Ayai Tomisawa
TOKYO, June 14(Reuters) - The Nikkei stock average rose on Tuesday, helped by sporadic buying from Asian investors and gaining momentum after China inflation data provided no nasty surprises, but concerns about the global economy could make the rebound short-lived.
Analysts said that Chinese inflation figures, which were released after the Tokyo market's morning trade closed, provided some relief that the country would not get more aggressive on tightening policy.
China's inflation accelerated to 34-month highs of 5.5 percent in the year to May, from April's annual pace of 5.3 percent, slightly above market expectations of a rise to 5.4 percent.
Although the reading could add to the case for Beijing to tighten monetary policy further, it was below the market's whisper number of 6 percent.
"The figures were almost in line with the forecasts, so investors were relieved," said Tsuyoshi Kawata, a senior strategist at SMBC Nikko Securities.
"But investors are still concerned about the slowing global economy and therefore the rebound may be short-lived."
Chinese industrial output rose 13.3 percent in May from a year earlier, just above expectations for an increase of 13.2 percent, but it was the slowest growth since November and in line with other data suggesting the world's second-biggest economy is slowing down.
The benchmark Nikkei rose 1.2 percent to 9,557.20 and the broader Topix gained 1.3 percent to 822.89.
Buying from Asian investors as well as continued interest in small cap shares from European investors that has been over the past week supported the market on Tuesday, a market player said.
The Nikkei has traded between 9,400 and 9,800 over the past few months and analysts expect that range to hold for the next few weeks, saying Tokyo shares look attractive, trading roughly at book value compared with around 2.1 times book value for the benchmark S&P 500 .
"Compared to the U.S., Japanese shares look cheap. In addition, the Japanese corporate earnings are likely to recover after a plunge after the disaster," said an official at a Japanese brokerage house.
But many think worries about the global economy could persist for the time being after a run of disappointing U.S. economic data helped to push U.S. shares to three-month lows.
"Support at 9,400 seems solid. But with both the U.S. and Chinese economy showing signs of losing momentum, the market doesn't have traction," said Toshiyuki Kanayama, a market analyst at Monex Securities.
Tokyo Electric Power Co jumped 21 percent to 241 yen after Japan's cabinet approved the compensation scheme for people affected by the crisis at its crippled Fukushima nuclear plant.
But it remains uncertain when, or even if, the scheme will be enacted into law, given the shaky political landscape under lame-duck Prime Minister Naoto Kan, who has been unable to push through several disaster-related bills in a divided parliament.
Other utilities also gained, with the electric and gas subindex gaining 5.7 percent, becoming the top sector gainer on the main board. Kansai Electric Power Co added 5.9 percent to 1,225 yen and Chubu Electric Power Co gained 9.1 percent to 1,257 yen.
TDK rose 3.3 percent to 4,430 yen after Credit Suisse raised its rating to "outperform" from "neutral".
(Additional reporting by Hideyuki Sano; Editing by Edwina Gibbs)