* Investors flock to Japan for cheap valuations – analyst * Takata underperforms after U.S. slaps on daily fine By Ayai Tomisawa TOKYO, Feb 23 (Reuters) – Japan’s Nikkei share average hit a new 15-year high on Monday after euro zone finance ministers reached a deal to extend heavily indebted Greece’s financial rescue by four months.

The Nikkei was up 0.9 percent at 18,490.98 points by mid-morning after rising as high as 18,509.08 earlier, its strongest level since May 2000.

The agreement removed the immediate threat that Greece could run out of money next month and be forced out of the single currency area. The new leftist-led Athens government now can try to negotiate longer-term debt relief with official creditors.

“The debt deal is giving comfort to the market,” said Masashi Oda, chief investment officer at Sumitomo Mitsui Trust Bank, but added that investors’ risk appetite is mainly due to Japanese shares’ attractive valuations.

He said that the Greek problem itself has not been resolved completely, and it may take a while to settle. But since the market consensus has been that its exit from the euro zone should not have a major contagion risk to the region anyway, the impact from the Greek problem should be limited to the Japanese market.

“Investors buy Japanese stocks because their valuations are cheaper than its peers in advanced markets,” Oda said.

The Topix’s average price-earnings ratio stands at 15.55, while the P/E ration for the S&P 500 is at 19.64.

Exporters rose, with Toyota Motor Corp rising 1.0 percent and Nissan Motor Co gaining 1.7 percent.

Outperforming the market was Itoham Foods, which gained as much as 5.2 percent to a three-week high after raising its net profit outlook to 11 billion yen from 5.5 billion yen for the year ending March.

Bucking the strength, Takata Corp dropped more than 3 percent after U.S. regulators on Friday slapped the company with a $ 14,000 daily fine for failing to fully cooperate with a probe of its faulty air bags.

The broader Topix gained 0.7 percent to 1,511.00 and the JPX-Nikkei Index 400 advanced 0.8 percent to 13,712.23.

(Editing by Kim Coghill)