(Repeats June 2 item with no changes to text)
* Autos, banks underperform broader market
* Earnings estimates on MSCI Japan index inching lower
* Investors hesitant despite Nikkei's cheap valuations
* Investors cherry-pick individual stocks in thriving sector
By Ayai Tomisawa and Nichola Saminather
TOKYO/SINGAPORE, June 2 (Reuters) - A 10 percent surge over six weeks swept Japan's Nikkei stock index above the 20,000-point barrier for the first time since late 2015 on Friday, without dispelling doubts about the rally's shelf life given the outlook for automakers, banks and the yen.
Data shows foreign investors, who make up 70 percent of trading activity in the Tokyo market, rushed to cover short positions as a rally from the year's low on April 17 gathered momentum.
But the data also shows foreigners avoided making heavy bullish bets, probably because analysts expect Japan Inc.'s earnings growth to falter.
The number of companies on the MSCI Japan index with earnings estimates down from the previous month has climbed steadily since mid-April and is now at its highest since December, according to Thomson Reuters DataStream.
After 16 percent profit growth in the year ended in March, Japanese firms are expected to show slower growth in the year ending March 2018. According to Nomura, consensus forecasts for full year profit growth came down to 11.4 percent in May from 13.3 percent in April.
"The conservative earnings guidance has tempered sentiment towards Japanese stocks in the near term," said Jeremy Osborne, investment director at FIL Investments in Tokyo.
Notching a third straight week of exits, U.S.-based Japanese stock funds posted $194 million of withdrawals during the week ended Wednesday, according to Lipper data.
REASONS TO BE CAREFUL
Investors' biggest concerns are the potential for the yen to strengthen, undermining Japan's export driven corporates, and the murky outlook for the two biggest sectors in the benchmark index - automakers and financials.
"The problem is a big chunks of the market are exporters, and the biggest export sector is autos, and the outlook for the auto sector globally has turned down," said John Doyle, chief investment officer for equities and multi-asset at UOB Asset Management in Singapore.
"And the low interest rates that are persistent in Japan are not good for financials," Doyle added, explaining why he is neutral on Japanese stocks in the group's global portfolio.
New vehicle sales in the United States, Japan's top export destination, fell in April following disappointing numbers in March, signalling a long boom cycle may be losing steam.