UPDATE 2-Tiffany's profit beats on higher sales in Japan

* Q2 revenue $959.7 mln vs est of $930.3 mln

* Q2 EPS $0.92 vs est of $0.84

* Q2 comp sales down 2 pct vs est of fall of 1 pct (Adds details, background, shares)

Aug 24 (Reuters) - Tiffany & Co reported bigger-than-expected quarterly profit and sales, helped in part by higher sales of wholesale diamonds and strong demand for its fashion and designer jewelry in Japan.

The company's shares rose 3 percent to $91.40 before the bell on Thursday.

The New York-based retailer said it also benefited from sales of high-margin jewelry, such as the Tiffany T collection, which was first crafted by its former design director Francesca Amfitheatrof.

The collection features items such as the $10,500 square bracelet with pave diamonds in 18k white gold.

The company, which gets about 15 percent of its revenue from Japan, saw comparable sales rise 3 percent in the region in the reported quarter.

Sales at established stores open for more than a year fell 2 percent, steeper than the 1 percent fall expected by analysts polled by research firm Consensus Metrix.

Comparable sales in the Americas, its biggest market, fell 1 percent due to lower tourist spending and weak demand across categories other than fashion and designer jewelry.

However, Tiffany has been struggling to improve sales of its cheaper silver jewelry as shoppers shift to chic brands such as Pandora A/S and Alex and Ani.

Tiffany had also appointed Coach's former Creative Director Reed Krakoff as its chief designer in January, to launch newer designs and better compete with millennial-centric brands.

Net sales rose 3 percent to $959.7 million in the second quarter ended July 31, beating the analysts' average estimate of $930.3 million, according to Thomson Reuters I/B/E/S.

Shares of Signet Jewelers Ltd, which sells jewelry at lower prices than Tiffany, were up 15 percent on Thursday after it reported better-than-expected sales and said would buy the parent company of online jeweler JamesAllen.com R2Net, for $328 million.

Net income rose to $115 million, or 92 cents per share, in the second quarter, from $105.7 million, or 84 cents per share, a year earlier.

Analysts had expected the company to earn 84 cents per share. (Reporting by Gayathree Ganesan in Bengaluru; Editing by Shounak Dasgupta)