* Investment ideas go beyond obvious baby goods makers - fund manager
* Japanese education services providers may see demand in China - fund manager
* Effects may not take place until 2015 - Nomura
TOKYO, Dec 4 (Reuters) - Investors in Japanese stocks are making long-term bets on companies that seem well-placed to benefit from China's plans to relax its one-child policy, with musical instrument makers, toy manufacturers and food companies among their favoured picks.
China unveiled sweeping social and economic reforms last month that are aimed at increasing productivity and transforming China's export-based economy into a consumption and services-driven model.
Beijing's boldest set of reforms in three decades will create many long-term opportunities, particularly for China's biggest trading partner, Japan.
The relaxation of the one-child policy was the most eye-catching reform, and investors' focus inevitably fell on obvious plays such as baby goods makers like Pigeon Corp , whose shares jumped on the news, and have gained more than 140 percent this year.
But, Pigeon is trading at a relatively high valuation of 5.6 times its book value, said Drew Edwards, managing director at Advisory Research Investment Management.
The same goes for disposal diaper maker Unicharm Corp , whose shares surged 4.2 percent on the first trading day after the announcement and has gained 44 percent in the year-to-date.
Edwards reckoned investors were probably overestimating how much some Japanese companies, like producers of maternity products, baby goods and diapers, stood to prosper from the relaxation of China's one-child policy.
"On the other hand, the market is probably ignoring the likely benefit to less obvious beneficiaries of the policy reform," he said.
Edwards is optimistic about Yamaha Corp, which sells many musical instruments in China, where many parents encourage their children to learn how to play an instrument at a young age.
Last fiscal year, Asian markets, mainly China, generated more than 80 percent of Yamaha's operating profit, but despite this positive trend, Yamaha still trades at attractive levels -- 1.2 times its book value, Edwards said.
His other recommendations included companies that own intellectual property rights such as video game maker Namco Bandai Holdings, due to the popularity of Japanese cartoon characters in China.
Hokuto Corp is another company in his portfolio. It sells high quality food through a secure supply chain to Chinese families, as recent scandals in China have heightened demand.
China is already a large export market for Japanese producers of goods such as autos, electronics appliances and toiletries, but many services could also benefit from the expected increase in population, investors said.
"If the working population grows, not only products but also services can tap into the market," said Makoto Kikuchi, the chief executive of Myojo Asset Management.
He said that education services providers, such as those that offer courses online or by mail, may also find growth opportunities in China.
Kikuchi said Benesse Holdings Inc and Justsystem Corp, which have a domestic Japanese focus now, may have opportunities in China in the future.
But some said investors were still cautious because there were few details as to how or when the new policies would be implemented.
China relaxing its one-child policy is positive for sentiment, but fundamentals are unlikely to be affected until 2015 at the earliest because the working-age population will not be evident until then, Nomura said in a report.
There are other reasons to be cautious, given the heightened tensions between Tokyo and Beijing over disputed islands in the East China Sea.
But, investors appear confident that economic interests will stop the dispute getting out of hand. Japanese shares have shown scant reaction to the row in recent weeks, but when the issue erupted in September last year, Japanese companies, particularly automakers, suffered a sharp drop in sales to China.
(Editing by Simon Cameron-Moore)