* 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. [
]"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 <
> 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 <
> 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 <
> 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. [
] (Editing by Chris Gallagher)