*Nikkei up 2 percent on hopes for U.S. rescue plan
*Financial shares gain after Wall Street rally
*Nomura jumps on news to bid for Lehman Asia, Europe units
(Adds stocks and comments)
By Aiko Hayashi
TOKYO, Sept 22 (Reuters) - The Nikkei average rose 2 percent
to a one-week high on Monday, buoyed by financial shares, on
hopes for the $700 billion bank bailout proposed by the United
States over the weekend to tackle the financial crisis.
Nomura Holdings <8604.T> shot up more than 8 percent after
two financial industry sources told Reuters that Japan's largest
brokerage has bid for both the Asian and European operations of
U.S. investment bank Lehman Brothers <LEHMQ.PK>. []
"The market mood has brightened thanks to the (U.S. bailout)
proposal," said Kenichi Hirano, operating officer at Tachibana
Securities.
"Investors are now watching whether it can reverse the course
of the situation, because it has the potential to, but few people
expect it to actually solve all the problems that we are facing,"
he said.
The Bush administration asked Congress on Saturday for $700
billion to bail out firms burdened with bad mortgage debt,
seeking extraordinary authority as it tackles the worst financial
crisis since the Great Depression. []
But U.S. stock index futures opened lower on Sunday evening,
suggesting U.S. stocks may give back some of Friday's massive
rally, as investors awaited details of the proposed bank bailout.
The benchmark Nikkei average <> added 236.04 points to
end the morning session at 12,156.90, hitting its highest level
since Sept. 12. The Nikkei ended Friday up 3.8 percent, though it
shed 2.4 percent for the week.
The broader Topix <> gained 2.2 percent to 1,174.70.
Yutaka Miura, deputy manager of the equity information
department at Shinko Securities, said gains were capped after an
initial rally as the market has recently advanced sharply and
before a holiday on Tuesday in Japan.
"In the short term, the market is in a rebound phase due to a
series of financial measures, including the strengthening of
short-selling regulations," he said.
"But since stocks have jumped so rapidly, it's natural they
take a breather."
Blue-chip exporters such as Canon Inc <7751.T> also climbed
after a huge relief rally in U.S. stocks on Friday, encouraged by
sweeping government measures to rescue the financial system and
restore confidence in shaky markets.
In a bid to stabilise markets, U.S. securities regulators
joined regulators from other countries in temporarily banning
short sales of financial shares.
BANKS GAIN
Japan's top lender Mitsubishi UFJ Financial Group <8306.T>
climbed 4.2 percent to 898 yen and No. 2 Mizuho Financial Group
<8411.T> gained 4.3 percent to 466,000 yen.
Shares of Nomura jumped 8.5 percent to 1,416 yen.
Last week saw a dramatic reshaping of the financial landscape
as AIG <AIG.N> was bailed out, Lehman Brothers <LEHMQ.PK> filed
for bankruptcy and Merrill Lynch <MER.N> was forced into
partnership with Bank of America <BAC.N>.
Digital camera maker Canon added 3.5 percent to 4,410 yen,
while Sony Corp <6758.T> gained 3.3 percent to 3,480 yen.
Honda Motor Co <7267.T> jumped 6.6 percent to 3,550 yen, the
top positive contributor to the Nikkei 225, also after the real
<BRBY> soared 5 percent before the weekend. The automaker is the
top seller in Brazil's massive motorcycle market.
Fellow automaker Suzuki Motor Corp <7269.T> gained 3.9
percent to 2,115 yen on gains in the Indian rupee. India is
Suzuki's biggest market.
Trade was moderate on the Tokyo exchange's first section,
with 1 billion shares changing hands, almost in line with last
week's morning average.
Advancing stocks beat declining ones by 2 to 1.
(Reporting by Aiko Hayashi; Editing by Chris Gallagher)
