(Adds stocks and comments)
By Taiga Uranaka
TOKYO, March 19 (Reuters) - Japan's Nikkei share average
jumped 2.8 percent on Wednesday, tracking steep gains on Wall
Street after solid results from two top investment banks soothed
investor nerves after Bear Stearns' sudden downfall.
The dollar's overnight gains also helped exporters, with
digital camera maker Canon Inc <7751.T> rising more than 7
percent and Honda Motor Co Ltd <7267.T> up nearly 6 percent.
Takeda Pharmaceutical Co <4502.T> rose after a source said
Japan's largest drug maker plans to buy out Abbott Laboratories
Inc's <ABT.N> stake in their 50-50 U.S. joint venture for 500
billion yen ($5 billion).
Still, gains may be limited ahead of a national holiday on
Thursday, when Tokyo markets will be closed, and as turmoil in
the global credit market is seen far from over.
"The biggest reason for Wall Street's gain is Lehman's
earnings. The market has been in fear about who's going to be
next after Bear Stearns," said Kenichi Hirano, operating officer
at Tachibana Securities.
Goldman Sachs <GS.N> and Lehman Brothers <LEH.N> posted lower
quarterly earnings on Tuesday, but both topped forecasts,
reassuring investors that bank profits were intact despite the
escalating credit crisis.
But Hirano said a sustained rally was unlikely, with
investors also holding off ahead of the holiday.
"The overall trend has not changed. It's not as if U.S.
housing prices have started heading upward or consumer spending
is picking up," he said.
Hitoshi Yamamoto, chief executive of Fortis Asset Management
Japan, said the vicious cycle of the credit crunch being caused
by mortgage troubles would not see an end unless the U.S.
government decides to inject public money into distressed
financial institutions.
"The fallout of Bear Stearns seems not to be spreading for
now, but there are more to come. It remains to be seen what
results for the January-March quarter will be like," he said.
The benchmark Nikkei <> ended the morning session up
328.57 points at 12,292.73 after rising as high as 12,374.75. The
broader TOPIX <> was up 3 percent at 1,198.67.
Takeda climbed 2.9 percent to 5,010 yen. The drug maker has
long had its eye on gaining full control of TAP Pharmaceutical
Products Inc but has been at odds with Abbott over the price.
Canon rose 7.2 percent to 4,610 yen, the biggest contributor
to the Nikkei, and Honda gained 5.7 percent to 2,780 yen.
Other exporters made sharp gains, with Toyota Motor Corp
<7203.T> up 5.3 percent at 5,150 yen and Sony Corp <6758.T> up
6.3 percent at 4,220 yen.
The dollar was trading at 99.77 yen <JPY=>, well above the
nearly 13-year low of 95.77 yen hit earlier this week.
The U.S. Federal Reserve on Tuesday cut benchmark interest
rates by 75 basis points to 2.25 percent. The cut was smaller
than expected by some in the market.
BANKS UP
Bank shares shot up, with top Japanese bank Mitsubishi UFJ
Financial Group <8306.T> gaining 4.3 percent to 844 yen.
No. 2 Mizuho Financial Group <8411.T> gained 3.5 percent to
384,000 yen. Sumitomo Mitsui Financial Group <8316.T>, Japan's
third-biggest bank, climbed 5.1 percent to 679,000 yen.
Nomura Holdings Inc <8604.T>, Japan's largest brokerage,
jumped 8.4 percent to 1,545 yen.
In Osaka, video game maker Nintendo Co Ltd <7974.OS> jumped
6.1 percent to 52,600 yen.
Trade slowed on the Tokyo exchange's first section, with 962
million shares changing hands, compared with the last week's
morning average of 1.2 billion.
Advancing stocks beat declining ones by a ratio of nearly 10
to 1.
(Editing by Chris Gallagher)
