* Nikkei up 2.8 pct, erasing Monday's losses
* Exporters gain after yen retreat, techs up after U.S. rise
* Gains limited before Japan GDP data on Wednesday
By Elaine Lies
TOKYO, May 19 (Reuters) - Japan's Nikkei stock average rose
2.8 percent on Tuesday, with exporters such as Canon Inc <7751.T>
climbing in the wake of the yen's retreat against the dollar.
Advantest Corp <6857.T> and other high-tech shares advanced
after broad gains in U.S. shares, which rose on hopes the
recession may be easing and consumer spending reviving.
Bank shares rose as well, with top bank Mitsubishi UFJ
Financial Group <8306.T> -- which announces earnings later on
Tuesday -- up 5.7 percent at 626 yen.
Market analysts said the Nikkei's climb was a natural
recovery in the wake of Monday's 2.4 percent fall, but that gains
were limited due to wariness before the release of Japan's
first-quarter gross domestic product data due out before the open
on Wednesday.
"Nobody really wants to take on new risk ahead of this," said
Tomomi Yamashita, a fund manager at Shinkin Asset Management.
"At the same time, there's a bit of risk from currency
movements, and while the dollar recovered yesterday against the
yen on a Japanese official's comments amounting to verbal
intervention, these gains are shaky."
The dollar edged up against the yen after climbing from a
two-month low near 94.50, buoyed by comments from Japanese Vice
Finance Minister Kazuyuki Sugimoto that he was watching foreign
exchange market moves closely and hoped they would not have a
negative effect on the economy. [] []
It was trading at 96.26 yen by midday <JPY=>.
U.S. shares rose as strong results from U.S. home improvement
retailer Lowe's <LOW.N> raised hopes the recession is easing,
sparking buying of sectors aligned with economic growth such as
banks, energy companies and retailers. []
"The Nikkei gained something like 34 percent from March 10 to
May 11, so a bit of a correction was only natural given the fact
that the fundamental economy still isn't that strong," said
Hiroichi Nishi, general manager at the equity division of Nikko
Cordial Securities.
"Now the market will look upward while closely watching
economic indicators."
The benchmark Nikkei <> was up 254.40 points at
9,293.09, after earlier rising as much as 3.2 percent to
9,326.75. The broader Topix <> gained 2.1 percent to 877.72.
Analysts said the benchmark was likely to remain range-bound
after support provided by the Nikkei's 25-day moving average at
about 8,954 held on Monday.
EXPORTERS, RESOURCES, TECHS
Canon Inc <7751.T> surged 4.8 percent to 3,300 yen, becoming
the second-biggest contributor to the Nikkei 225. Toyota Motor
Corp <7203.T> rose 2.8 percent to 3,660 yen. Sony Corp <6758.T>
gained 3.5 percent to 2,505 yen.
Resource-linked shares powered up after oil edged higher,
building on 4.8 percent gains made the previous day when violence
in Africa's top crude exporter Nigeria and a fire at a key U.S.
refinery revived supply concerns. []
Oil and gas field developer Inpex <1605.T> rose 4.8 percent
to 703,000 yen, while trader Itochu Corp <8001.T> climbed 3.4
percent to 638 yen.
High-tech shares advanced after the Philadelphia
Semiconductor Index <.SOXX> climbed 3.7 percent.
Advantest Corp <6857.T> rose 6.2 percent to 1,662 yen, TDK
Corp <6762.T> climbed 4.5 percent to 4,410 yen and Kyocera Corp
<6971.T> gained 1.7 percent to 7,500 yen.
Lawson Inc <2651.T>, Japan's second-largest convenience store
chain, lost 1.7 percent to 4,050 yen after a source said it was
likely to scrap its plan to buy smaller rival am/pm Japan Co
after the U.S. licence holder demanded that some stores retain
the name. []
Volume was moderate, with 1.2 billion shares changing hands
on the Tokyo exchange's first section, in line with last week's
morning average.
Advancing shares outnumbered declining ones by more than 4 to
1.
(Reporting by Elaine Lies; Editing by Chris Gallagher)
