Nikkei rises 5.5 pct, buoyed by China spending plan

                                
 *Nikkei gains 5.5 percent in light trade
*Machinery stocks gain on hopes for China economic plan
                                
 *Exporters rise as yen weakens
 (Adds stocks, details)
By Elaine Lies
                                
 TOKYO, Nov 10 (Reuters) - Japan's Nikkei average climbed 5.5
percent on Monday, with exporters boosted by a weaker yen and
machinery firms such as Komatsu Ltd <6301.T> surging after China
launched a massive economic stimulus plan. [ID:nN09395080].
Shippers also gained on the plan launched by China on Sunday
that is worth nearly $600 billion and emphasises infrastructure
and social projects, as it raised hopes that such efforts could
offset slowing economies in the United States and Europe.
Shares of Panasonic Corp <6752.T> trimmed gains after jumping
more than 6 to 1,630 yen after the firm said it aims to make
Sanyo Electric Co Ltd <6764.T> a subsidiary and has agreed to
start talks with the smaller rival for that purpose in a move
that would create Japan's largest electronics maker.
[ID:nT305137]
While a Wall Street rebound was also cited as an impetus
behind the Nikkei's rise for setting off a round of
short-covering, several market players said the China plan was
likely to be even stronger as a factor.
                                
 "There's hope that if this package increases domestic demand,
this will revive a key market for Japanese companies that could
help offset lagging economies in the United States and Europe,"
said Fujio Ando, a senior managing director at Chibagin Asset
Management.
                                
 The benchmark Nikkei <.N225> ended morning trade up 470.90
points at 9,053.90 in light trade, while the broader Topix
<.TOPX> gained 4.2 percent to 915.52 after also earlier rising
more than 5 percent.
                                
 Hopes for the China stimulus plan helped the market shrug off
data showing core Japanese machinery orders posted their biggest
quarterly fall in a decade in July-September, with manufacturers
expecting only a small rebound in the last quarter of the year --
data that bodes ill for capital investment as the economy teeters
on the brink of recession. [ID:nT17704]
                                
 But others warned that the boost was likely to be temporary
at best, noting that investors may have used it as an excuse to
snap up shippers and machinery shares, both of which have been
beaten sharply down in recent weeks.
                                
 "After all, in terms of the overall economic outlook both
domestically and overseas, nothing's really changed yet," said
Yumi Nishimura, deputy general manager at the investment advisory
section of Daiwa Securities SMBC.
                                
 MARCHINERY MARCHES UPWARDS
                                
 Hitachi Construction Machinery <6305.T>, a second-ranked
manufacturer of hydraulic shovels, soared 17.3 percent to 1,234
yen. But it has lost 68 percent from its year's high of 3,830 yen
hit on June 6.
                                
 Komatsu climbed 9.5 percent to 1,226 yen and Kubota Corp
<6326.T> gained 15.2 percent to 539 yen.
                                
 Shippers, similarly battered, managed to climb despite
further losses on Friday in a key freight index.
                                
 The Baltic Exchange's dry sea freight index <.BADI>, used by
economists to help predict global growth cycles, fell 1.2 percent
on Friday to 829, not far above a nine-year low of 815 hit on
November 4.
                                
 But hopes for further Chinese construction projects due to
the economic plan helped the shipping sub-index <.ISHIP.T> surge
10.3 percent on Monday, making it the biggest gainer among the
subindices.
                                
 Kawasaki Kisen K.K. <9107.T> climbed 11.2 percent to 408 yen,
while Mitsui O.S.K. Lines <9104.T> rose 11.1 percent to 519 yen.
Nippon Yusen <9101.T>, Japan's largest shipping firm, powered up
9.7 percent to 499 yen.
                                
 By index weight, the biggest contributors to the Nikkei 225
were divided between exporters and "defensive" shares such as
drugmakers, as investors bought shares seen as resilient in the
face of economic slowdowns.
                                
 Astellas Pharma Inc <4503.T> rose 8.3 percent to 4,170 yen
and Takeda Pharmaceutical <4502.T> climbed 5.8 percent to 4,940
yen.
                                
 Canon Inc <7751.T> rose 4.9 percent to 3,430 yen, Honda Motor
Co <7267.T> gained 5.1 percent to 2,375 yen and Sony Corp
<6758.T> climbed 9.4 percent to 2,385 yen.
                                
 Panasonic rose 3.5 percent to 1,581 yen after earlier
climbing more than 6 percent.
                                
 Trade was light on the Tokyo exchange's first section, with
917 million shares changing hands, compared with last week's
morning average of 1.1 billion shares.
                                
 Advancing stocks outpaced declining ones by nearly 7 to 1.
  (Reporting by Elaine Lies; Editing by Michael Watson)