Japan stocks up as U.S. fears ease, yen stabilises

                                
 (Adds stocks, details)
                                
 By Aiko Hayashi
                                
 TOKYO, March 6 (Reuters) - Japan's Nikkei average rose 1.4
percent on Thursday after hitting a six-week closing low the
previous day, with exporters such as Honda Motor Co Ltd <7267.T>
rising on a stabilising yen and easing concerns about a U.S.
recession.
                                
 Resource-related shares such as Sumitomo Metal Mining Co Ltd
<5713.T> gained on a jump in metal prices, while record oil
prices lifted trading houses and Japan's top oil and gas
developer, Inpex Holdings Inc <1605.T>.
                                
 U.S. stocks rose on Wednesday as data suggesting the services
sector may not be as weak as feared allayed investors' concerns
about a recession. [.N]
                                
 "Investors are encouraged by the better-than-expected U.S.
economic data and calmer currency moves, with the yen trading
around 104 yen to the dollar," said Zenshiro Mizuno, senior
managing director in equity trading at Marusan Securities.
                                
 "But gains are limited as investors are trying to decide if
now is the time to buy or if they should wait for another
possible downward spike, though the market is generally moving on
expectations that the global economy, including the United
States, is likely to recover later this year."
                                
 The benchmark Nikkei average <.N225> was up 186.26 points at
13,158.32 after logging its lowest close since Jan. 23 on
Wednesday.
                                
 The broader TOPIX index <.TOPX> added 1.5 percent or 19.06
points to 1,282.97.
                                
 Mizuno said that concerns about the earnings outlook for
Japanese companies were putting a lid on market gains and that
currency levels would determine their direction.
                                
 Most Japanese firms have set their assumed currency level
around 105 yen to the dollar for the year, so a stronger yen
sparks concerns about their earnings outlooks.
                                
 EXPORTERS IN FAVOUR
                                
 The dollar was trading around 103.77 yen <JPY=> after
climbing to around 104.18 in New York. The dollar logged a
three-year low of 102.6 yen on Monday.
                                
 Shares of Honda rose 1.6 percent to 3,120 yen, Canon Inc
<7751.T> advanced 2 percent to 4,630 yen, and industrial robot
maker Fanuc Ltd <6954.T> climbed 2.9 percent to 9,580 yen.
                                
 Inpex jumped 6 percent to 1.24 million yen after oil rallied
$5 to a record near $105 a barrel on Wednesday.
                                
 Gold and copper producer Sumitomo Metal Mining climbed 3.7
percent to 2,230 yen after gold set a record high near $1,000 an
ounce on Wednesday as rising energy prices increased gold's
appeal as a hedge against inflation.
                                
 Trading houses benefited from the higher commodity prices,
with Mitsubishi Corp <8058.T> up 5 percent at 3,380 yen, while
Mitsui Co Ltd <8031.T> added 2.1 percent to 2,400 yen and Itochu
Corp <8001.T> rose 3.8 percent to 1,173 yen.
                                
 Kenichi Hirano, operating officer at Tachibana Securities,
said investors found it hard to buy steel stocks ahead of Nippon
Steel Corp's <5401.T> earnings forecast for the year, due to be
announced at 0430 GMT. Nippon Steel was down 0.6 percent at 520
yen.
                                
 Trade was light on the Tokyo exchange's first section, with
831 million shares changing hands, compared with last week's
morning average of 964 million.
                                
 Advancing shares outnumbered decliners by nearly six to one.
 (Reporting by Aiko Hayashi; Editing by Hugh Lawson)