* Media reports say government mulls 20 trln yen package
* Oil shares, exporter stocks lead gains
* Topix hits 6-week high
By Ayai Tomisawa
TOKYO, July 21 (Reuters) - Japan’s Nikkei share average rose to a seven-week high on Thursday morning, buoyed by gains in Wall Street and a weaker yen, and fresh expectations of large stimulus measures from the government lifted risk appetite.
The Nikkei rose 1.4 percent to 16,908.25 in midmorning trade after reaching as high as 16,938.96, the highest since June 1.
Several media such as Mainichi Shimbun and Kyodo News Agency reported that the Japanese government is to compile a stimulus package of at least 20 trillion yen to help the economy emerge from deflation and fend off possible adverse effects of Brexit.
“What the market wants now is both fiscal and monetary policy and such expectations are getting higher,” said Hikaru Sato, a senior technical analyst at Daiwa Securities.
A Reuters poll showed 85 percent of analysts expect the Bank Of Japan to ease on July 29, alongside the fiscal spending boost Prime Minister Shinzo Abe is set to announce this month.
The S&P 500 and Dow industrials set fresh records, triggering buying while a recovery in crude oil prices also helped mining stocks.
The mining sector was the best performer on the board, surging 3.8 percent. Inpex Corp soared 4.0 percent and Japan Petroleum Exploration jumped 4.3 percent.
Exporters also staged a rally as the dollar climbed to a six-week peak against the safe-haven yen. Toyota Motor Corp rose 1.6 percent and Honda Motor Co surged 4.3 percent.
On the other hand, defensive stocks languished, with food and land transport counters underperforming the market. Kewpie dropped 1.3 percent and Ajinomoto Co shed 0.3 percent. East Japan Railway Co shed 1.5 percent and West Japan Railway Co declined 1.0 percent.
The broader Topix gained 0.8 percent to 1,341.13 after touching a six-week high of 1,347.24.
The JPX-Nikkei Index 400 advanced 0.8 percent to 12,046.80. (Reporting by Ayai Tomisawa; Editing by Eric Meijer)