Nikkei hits 2-mth high on US hopes, REITs jump

                                
 * Nikkei gains 1 pct, hits highest point in over 2 months
                                
 * REIT, property stocks jump on easing financing worries
                                
 * Elpida continues rally on share issue plan
                                
 By Aiko Hayashi
                                
 TOKYO, March 27 (Reuters) - Japan's Nikkei average hit its
highest point in over two months on Friday with exporter shares
such as Canon Inc <7751.T> climbing on a weakening yen and after
U.S. data sparked optimism about an economic recovery.
                                
 Shares of real estate investment trusts (REITs) such as
Kenedix Realty Investment Corp <8972.T> and property firms surged
after the Nikkei business daily reported Japan may start a fund
to buy REIT properties. [ID:nT62895]
                                
 "A series of favourable news has coincided with a rally led
by short covering. So even though it's overheated at this point,
the upward trend will likely continue for a while longer," said
Mitsushige Akino, chief fund manager at Ichiyoshi Investment
Management.
                                
 "The Nikkei could even test 9,000 today -- the U.S. 'bad
bank' scheme is progressing and the housing and consumer spending
situation appears to be getting better."
                                
 The benchmark Nikkei <.N225> climbed 83.22 points or 1
percent to 8,719.55, after earlier rising 2.4 percent to touch
its highest point since Jan. 9.
                                
 It gained 1.8 percent the previous day to be more than 10
percent above its 25-day moving average.
                                
 The broader Topix <.TOPX> added 0.9 percent to 834.48.
                                
 U.S of revival in the economy. [.N]
                                
 PROPERTY, REIT STOCKS SURGE
                                
 The Nikkei newspaper said Japan's ruling coalition may set up
a fund that would use money raised from the public and private
sectors to buy properties held by real estate investment trusts
and to make loans to REITs.
                                
 The Tokyo REIT index <.TREIT> surged 7.2 percent and the real
estate subindex <.IRLTY.T> gained 2.9 percent.
                                
 "The REIT news will start having an impact on the sector
little by little and I expect to see a correction in those share
prices, which had been pushed down too much," Akino said.
                                
 Kenedix Realty Investment soared 18.4 percent to 184,500 yen,
while Premier Investment Corp <8956.T> surged 14.7 percent to
313,000 yen and Top REIT Inc <8982.T> jumped 7.2 percent to
387,000 yen.
                                
 Other property firms also powered higher, with Mitsui Fudosan
<8801.T> gaining 3 percent to 1,223 yen and Mitsubishi Estate
<8802.T> advancing 2.2 percent to 1,253 yen.
                                
 "It seems the news helped ease investor worries about REITs'
financing problems," said Daisuke Seki, a REIT analyst at
independent consultancy IB Research & Consulting Inc.
                                
 "If the fund is really able to buy assets from REITs, then
that would help such REITs raise much needed cash and prompt cash
flows in the market."
                                
 The paper said the plan is expected to be a component of
financial proposals the ruling bloc will compile this month.
                                
 The dollar was trading around 98.40 yen <JPY=>, after falling
below 94 yen last week.  Investors welcome a weaker yen as it
boosts exporters' profits when repatriated.
                                
 Canon jumped 5.2 percent to 3,120 yen and Honda Motor Co
<7267.T> climbed 3.8 percent to 2,465 yen. The stocks were among
the top positive contributors to the Nikkei 225. on
Top News, visit http://topnews.reuters.com))