(Updates to midmorning)

TOKYO, Jan 6 (Reuters) - Japan's Nikkei average climbed 0.7 percent on Tuesday, the first full trading day of 2009, as Canon Inc (7751.T: Quote, Profile, Research) and other exporters rose on a weaker yen and hopes for the U.S. administration taking office later this month.

Market participants said investors were still keen to buy shares that had been sold off heavily last year, helping them discount dismal news.

"Growing expectations for the administration of (U.S. President-elect Barack) Obama are making investors that much more willing to take risks, and I think we're also seeing more buying by foreign investors," said Hideyuki Ishiguro, supervisor at the investment advisory department of Okasan Securities. "It's a fact that foreign orders are increasing, and I think the more established stock markets have greater liquidity than those of emerging markets."

Toyota Motor Corp (7203.T: Quote, Profile, Research) rose in line with the broader market despite posting a 37 percent drop in U.S. sales in December, its worst decline since at least 1980. [ID:nL5118725]

It also said it plans to halt production at all of its plants in Japan for a total of 11 days in February and March.[ID:nT158]

The benchmark Nikkei .N225 climbed 58.48 points to 9,101.60, while the broader Topix .TOPX was up 0.1 percent to 877.11.

Wall Street slipped on Monday as investors moved to lock in profits, but Ishiguro said that Tokyo shares were supported by a sense that they remained relatively cheap. The Nikkei lost 42 percent in 2008, its worst year ever.

Others, though, warned that gains could be limited.