Nikkei climbs 2 pct, yen boosts exporters

                                
 * Nikkei relative strength index rises above 40
                                
 * Nikkei remains well below 25-day moving average
                                
 * Signs of funds having more risk-taking appetite  -analyst
                                
 * Bank minister resignation positive for financials -analysts
                                
 By Aiko Hayashi
                                
 TOKYO, June 11 (Reuters) - Japan's Nikkei average climbed 2
percent on Friday, helped by a halt in the yen's advance against
the euro and signs of health in the euro debt market.
                                
 Financial stocks such as Mitsubishi UFJ Financial Group
<8306.T> rose after Japan's Banking Minister Shizuka Kamei, an
advocate of financial regulation, said he would step down to
protest that a controversial postal bill would not be passed in
the current session of parliament.
                                
 In Europe, a bond sale by Spain saw strong demand, a positive
sign amid worries about appetite for debt from struggling
European nations. The euro rose more than 1 percent against the
dollar to trade above $1.21 in New York trade. [ID:nLDE6581SK]
                                
 "Funds have started to lean towards risk-taking after all-out
risk-reduction behaviour seen in mid- to late May, and domestic
investors are following suit," said Tsuyoshi Segawa, an equity
strategist at Mizuho Securities.
                                
 The benchmark Nikkei <.N225> was up 190.41 points at 9,733.06
by the lunch break, after earlier rising as much as 2.3 percent
to 9,764.73.
                                
 The index remained below its 25-day moving average of around
9,900, but its relative strength index rose above 40, with 30 and
below considered oversold.
                                
 Nikkei futures and options contracts expiring in June likely
settled at 9,747.59, Tokyo market participants said, citing
estimates by local brokerages.
                                
 The official settlement price will be announced by the Osaka
Securities Exchange after the market closes on Friday.
                                
 The broader Topix <.TOPX> added 1.5 percent to 869.51.
                                
 Notable gainers included Sharp Corp <6753.T>, which jumped
4.6 percent to 974 yen. Morgan Stanley MUFG hiked its rating on
the company to "overweight" and raised the price target, saying
the stock has priced in a negative scenario, especially regarding
the LCD business.
                                
 Shares of exporters gained on a halt in the advance in the
yen and a rally on Wall Street. The Dow Jones industrial average
<.DJI> jumped 2.8 percent and the Standard & Poor's 500 Index
<.SPX> rose 3 percent.
                                
 In early Asia trade, the euro added 0.1 percent to around
110.75 yen <EURJPY=R>, while the dollar rose to around 91.60 yen
<JPY=>.
                                
 Many Japanese exporters have set their currency assumption
rates for the euro around 120-125 yen for the year to March, and
for the dollar around 90-95 yen. Investors fret about a stronger
yen as it eats into exporters' profits when repatriated.
                                
 Among banking stocks, Japan's top lender Mitsubishi UFJ
gained 3.4 percent to 430 yen.
                                
 Analysts said the resignation of Kamei, a proponent of
financial regulation, was positive for financial stocks.
                                
 Transport Minister Seiji Maehara said on Friday that Chief
Cabinet Secretary Yoshito Sengoku will take on the role of
banking minister. But Kamei's party is expected to stay in the
ruling bloc ahead of an election expected next month.
[ID:nTKE006320]
 (Editing by Chris Gallagher)