* Short-term correction may be possible - analyst

* Strong July-Sept earnings may lift market in a few weeks -

Nomura

By Ayai Tomisawa

TOKYO, Oct 17 (Reuters) - Japan's Nikkei share average

extended gains into a seventh day and hit a three-week high on

Thursday after U.S. President Barack Obama said he would sign

legislation to reopen the government and avert a debt default as

soon as it reaches the White House.

The Nikkei was up 1.1 percent at 14,622.76 in

midmorning trade after hitting 14,664.22 earlier, its highest

since Sept. 27. The index traded above 14,606.66, a 61.8 percent

retracement of its May high to its June low.

"Investors seem excited as what was hanging over their heads

will finally be lifted," said Yoshiyuki Kondo, an analyst at

Daiwa Securities.

But he added that since the Nikkei has added 613 points, or

4.4 percent, over the past six sessions, there may be a

short-term correction in the market.

"The rises have been too sharp over a short period of time,"

Kondo said.

On Wednesday, U.S. Senate leaders hammered out an agreement

to break the fiscal impasse late on Wednesday, paving the way

for U.S. lawmakers to end the drama in Washington just hours

before the government exhausts its borrowing authority.

The Senate has passed the deal and sent the measure to the

House of Representatives for final passage, before Obama signs

it into law.

Exporters rose as the dollar gained 0.2 percent against the

yen to 98.96, with Toyota Motor Corp rising 0.8

percent, Honda Motor Co adding 1 percent and Sony Corp

advancing 0.9 percent.

Kansai Electric Power Co surged 4.6 percent after

the utility revised up its April-September earnings forecast due

to higher-than-expected revenue from air-conditioner usage in

the hot summer. It now expects an operating profit of 54 billion

yen ($546 million) for the six months compared with its initial

forecast for an operating loss of 20 billion yen.

Despite the possibility of a short-term correction, some

analysts said the Nikkei may trade above 15,000 in a few weeks.

Jun Yunoki, a strategist at Nomura Securities, said that

after the long-stalled U.S. debt ceiling problem is resolved,

the announcement from late October of Japanese companies'

second-quarter results could herald a considerable improvement

in market sentiment.

"We are expecting about a 50-60 percent rise on year in

companies' recurring profits for the second quarter. We are

bullish for the Japanese market through the end of the year," he

said.