* Weak yen lifts exporters
* ECB and China paved the way for more easing by BOJ - analyst
* Shippers fall on weaker-than-expected earnings
By Ayai Tomisawa
TOKYO, Oct 26 (Reuters) - Japan's Nikkei share average rose to a fresh two-month high after China's surprising rate cut lifted risk sentiment, while bellwethers Hitachi Ltd and Panasonic Corp surged on stronger earnings expectations.
The Nikkei gained 1.1 percent to 19,028.41 in midmorning trade after hitting as high as 19,088.76, the highest since Aug. 28.
China unexpectedly cut its benchmark one-year lending rate by 25 basis points to 4.35 percent and lowered the reserve requirement ratio for all banks in a bid to lift a sagging economy.
Risk sentiment has already been boosted by Thursday's message from European Central Bank President Mario Draghi that the bank was ready to adjust "the size, composition and duration" of its quantitative easing program.
"The ECB and China paved the way for additional easing by the Bank Of Japan," said Hiroaki Mino, director of investment information department at Mizuho Securities.
But he added that even if the BOJ stands pat on Friday, investors may not be severely disappointed because expectations of a cut will likely stay in the market for the rest of the year.
Hitachi jumped 8 percent after it raised its April-Sept net profit forecast by 39 percent from its previous forecast helped by strong demand for railroad equipment abroad and IT systems for the domestic financial industry.
Panasonic Corp soared more than 9 percent after the Nikkei reported that its operating profit likely rose 10 percent on the year to 200 billion yen for the first half ended September.
Exporters were in demand after the dollar brushed a 2-month peak of 121.60 yen as risk sentiment rose. Honda Motor Co rose 1.5 percent and Advantest Corp gained 2.6 percent.
On the other hand, shippers lost ground on the Nikkei report saying that three major Japanese shipping companies are expected to report lower-than-expected group pretax profit for the six months ended September on weak demand for bulk cargo carriers in the face of China's decelerating economy.
The sea transport sector fell 2.7 percent, the worst performer on the board: Nippon Yusen dropped 4.5 percent and Mitsui OSK Lines shed 1.8 percent, while Kawasaki Kisen also fell 1.8 percent.
The broader Topix gained 1.3 percent to 1,567.84 and the JPX-Nikkei Index 400 advanced 1.3 percent to 14,063.15. (Reporting by Ayai Tomisawa; Editing by Eric Meijer)