* Nissan outperforms peers after posting outstanding U.S. sales
* Construction stocks attract buy on strong domestic demand hope
By Ayai Tomisawa
TOKYO, July 2 (Reuters) - Japan's Nikkei share average rose more than 1 percent on Thursday, led by automakers which reported strong June sales in the U.S. market, and broadly supported by a weaker yen.
The Nikkei share average .N225 gained 1.2 percent to 20,568.65 by mid-morning.
The market has been pressure by Greece's festering debt crisis, but investors are buying back shares on the dips, traders said.
"It's merely a rebound and not aggressive buying," said Masashi Oda, senior investment officer at Sumitomo Mitsui Trust Bank, adding that buying force was not strong enough to push the Nikkei above a 18-1/2-year high of 20,952.71 hit last month.
Many investors were also awaiting Thursday's scheduled release of the closely watched U.S. non-farm payroll report for June, he noted.
"If the U.S. economic data is strong, the next thing investors will see is whether the Federal Reserve will hint a rate hike amid Greek woes in Europe," he said. "If the Fed takes a cautious stance on how the global market will perceive that, its move on a rate decision is in focus now."
Automakers were strong, with Nissan Motor Co 7201.T rising as high as 3.6 percent after its June U.S. sales rose 13 percent on the year helped by a 54 percent increase in its popular small SUV Rogue. ID:nL1N0ZH107
Honda Motor Co 7267.T added 2.3 percent after showing a 4 percent rise in U.S. sales, while Toyota Motor Co 7203.T gained 1.3 percent after its June sales rose 4 percent, roughly in line with expectations.
Meanwhile, the dollar traded at 123.22 yen JPY= , pulling further away from a five-week low of 121.93.
Goldman Sachs analysts say that consumption is expected to improve in the second half of the year.
The brokerage favours reflation-related sectors such as financials and real estate, which had long underperformed but have been rebounding since spring, it said.
(Editing by Kim Coghill)
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