* Nikkei up 2.03 pct, Topix gains 1.8 pct
* Exporters, financials log gains
* Fed's improved U.S. outlook, retail data buoy Nikkei
* Gree tops turnover list, sinks on broker downgrade
By Mari Saito
TOKYO, March 14 (Reuters) - Japan's Nikkei share average climbed to a seven-month high on Wednesday, boosted by Wall Street gains after the Federal Reserve upgraded its U.S. economic outlook, while Tokyo blue chips received a further lift from the softer yen.
Exporters and financials outperformed, with Sony Corp jumping 5.4 percent, Nissan Motor Co Ltd up 4.5 percent and Japan's leading investment bank Nomura Holdings Inc gaining 3.4 percent.
"It's only now that we begin to see foreign, real buying become more visible," said Stefan Worrall, director of equity cash sales at Credit Suisse in Tokyo, adding that core 30 buy orders and buying across the spectrum had increased.
The benchmark Nikkei gained 200.89 points to 10,099.97, climbing above 10,000 points for a fourth straight session to the highest level since late July.
Market participants said a real test of investor confidence would be whether the index could end the day above 10,000 points. The index has breached the level in three previous sessions, but has so far failed to finish above the mark.
"There's a lot of money sitting on the sidelines that hasn't benefited from the rally from beginning of the year, who are finding themselves flatfooted. There will be further upside in the Nikkei rally if we see real money continue to come in," said Worrall.
The broader Topix was up 1.8 percent at 860.66.
Trading volume on the Nikkei was at 70.9 percent of its average daily 90-day volume.
"People are picking up high-beta stocks now as the feeling is that Japan's market is still lagging global markets -- plus the weaker yen -- are providing a boost," said Yasuo Sakuma, portfolio manager at Bayview Asset Management.
In terms of valuations, the Topix carried a 12-month forward price-to-book ratio of 0.97, lower than S&P 500's 1.96 and STOXX Europe 600's 1.37.
Additionally, the dollar hit an 11-month high of 83.18 yen during early Asian trade, lifting investor appetites for exporters.
Bucking the market trend was Gree Inc, which topped the turnover list and shed 5.8 percent after Daiwa Capital Markets downgraded the social gaming company to neutral from buy and cut its six-month target price to 2,600 yen from 3,200.
Also heavily traded were Japanese megabanks Mizuho Financial Group Inc, Mitsubishi UFJ Financial Group Inc and Sumitomo Mitsui Financial Group Inc, up between 1.5 and 2.8 percent.
Japan's financials gained after their U.S. counterparts led Wall Street to its best performance this year, buoyed also by Fed stress test results that gave high marks to most of the largest banks.
The stress test results by the central bank came on the heels of an earlier announcement that the U.S. economy was "expanding moderately" although growth still faced significant downside risks.
Tuesday marked the first time that the Nasdaq closed above 3,000 and the Dow above 13,000 on the same day, also lifted by U.S. February retail sales recording their largest gain in five months despite rising gasoline prices.
"The U.S. economic picture has clearly brightened, monetary easing efforts have increased liquidity and boosted equities worldwide and, despite the fact that Japanese investors are heading into the book-closing period, demand remains strong," said Hiroichi Nishi, equity general manager at SMBC Nikko Securities.
But lingering concern about the impact of rising gasoline prices on U.S. consumer spending, and debt problems in Portugal and Spain meant the market was not free of worries.
"I do worry that we are in a goldilocks market that may be overheated," said Bayview's Sakuma.
The benchmark Nikkei was in "overbought" territory, with its 14-day relative strength index near 77.8. Seventy or above is considered overbought.
March is the final month of Japan's fiscal year, and market participants have been expecting many funds to lock in profit from the benchmark's 19.5 percent rally since the beginning of January, after shedding more than 13 percent in April to December.