TOKYO, Dec 22 (Reuters) - Japan's Nikkei share average rose on Thursday for the first time in more than a week, as investors bought back shares that had been beaten down by the Bank of Japan's surprise policy tweak.

Automaker shares rebounded strongly after the yen showed signs of stabilizing, and the real estate sector rallied as long-term bond yields also calmed down after steep climbs.

The Nikkei ended the morning session up 0.4% at 26,492.66, after dipping as low as 26,269.80 in the previous session for the first time since Oct. 13.

It sank 0.68% that day, extending the 2.46% plunge from Tuesday, when the BOJ unexpectedly allowed the benchmark 10-year Japanese government bond yield to rise an additional 25 basis points to as high as 0.5% under its yield curve control policy.

Among the Nikkei's 225 components, 163 rose, 54 fell and eight were flat.

The broader Topix gained 0.55% to 1,903.74.

"The BOJ decision was a massive surprise, but the markets seem be digesting it bit by bit, and it doesn't seem like the BOJ will be moving quickly toward rate hikes, so the Japanese stock market is gradually calming down," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

"For the rest of the year, the Nikkei will probably fluctuate around the current level of about 26,500, but in the new year, the focus should be back on U.S. inflation and the economic outlook."

The Topix's transport equipment sector rose 1.81%, with the yen stabilizing around 131.70 per dollar after spiking to a 4 1/2-month peak of 130.58 on Tuesday. A stronger yen reduces the value of overseas revenue.

Toyota climbed 2.05%, Nissan gained 2.59% and Suzuki jumped 3.16%.

Real estate gained 1.8%, with the 10-year JGB yield declining to 0.425%, after reaching the highest since July 2015 at 0.48% on Wednesday. (Editing by Rashmi Aich)