* Nikkei up but gains capped before U.S. events
* Toyota rebounds on fix announcement, helps buoy Nikkei
* Tightening in emerging economies a concern -fund manager
* Support near 10,100, resistance around 10,600 - analysts
By Aiko Hayashi
TOKYO, Feb 2 (Reuters) - Japan's Nikkei average rose 1.3
percent on Tuesday, with Toyota Motor Corp <7203.T> jumping after
detailing plans of its fix for recalled vehicles, while exporters
climbed on a weaker yen and strong U.S. manufacturing data.
Resource-linked shares such as trading house Mitsubishi Corp
<8058.T> gained ground after oil and gold settled up 2 percent on
Monday as commodity markets started February on a steadier note
after their worst fall in more than a year last month. []
But analysts said any overall Nikkei rise would be limited
ahead of a slew of events including a U.S. Senate hearing on the
Obama administration's proposed new limits on big banks later on
Tuesday and U.S. jobs data later this week.
"With expectations gradually coming off as earnings are
running their course, investors are starting to look to clues
about a recovery in the global economy such as the ISM and jobs
data," said Tomomi Yamashita, a senior fund manager at Shinkin
Asset Management.
"Another source of concern is moves in emerging countries,
and they could lead to limit further gains in the market for
now."
India on Friday raised banks' cash reserve requirements by
more than expected, joining a trend in other major emerging
economies towards gradual tightening of loose monetary policies.
China had already started to tighten policy by raising banks'
reserve requirements, clamping down on loan growth and accepting
higher yields at bill auctions. []
The benchmark Nikkei <> was up 136.53 points at
10,341.55, after briefly falling as far as 10,129.91 on Monday,
around the level of the Nikkei's 75-day average, which market
players said should serve as support for now.
Analysts said the Nikkei is likely to try resistance at
10,600 over the short term, but that it could fall back and test
support if it fails to break decisively above this.
The broader Topix <> rose 1.3 percent to 910.63.
The Institute for Supply Management's (ISM) manufacturing
index showed U.S. factory activity grew in January at a faster
rate than expected, helping send Wall Street higher on Monday.
[]
Friday will see the U.S. nonfarm payrolls report. Analysts
believe the economy added 5,000 jobs in January, a Reuters poll
showed. Another negative surprise after the previous month's
unexpected surge in job losses could roil markets. []
Testimony obtained by Reuters showed that Paul Volcker, an
economic adviser to President Barack Obama, will say that
limiting commercial banks' ability to engage in proprietary
trading -- when firms make bets on markets with their own money
-- will help reduce risk. []
"Once some of the details of the banking proposal are out, we
may know what direction the proposal will take, whether it'll be
softer on banks than many worry about or if it'll require banks
to limit risky assets, and how," said Noritsugu Hirakawa, a
strategist at Okasan Securities.
TOYOTA BOUNCES BACK
The dollar clawed higher against the yen by 0.1 percent to
90.68 yen <JPY=>. Investors fret about a stronger yen because it
eats into exporter earnings when repatriated.
Canon Inc <7751.T> rose 2.4 percent to 3,600 yen, Sony Corp
<6758.T> climbed 2.9 percent to 3,150 yen and Tokyo Electron
<8035.T> gained 2.4 percent to 5,600 yen.
Toyota jumped 4.8 percent to 3,615 yen after it detailed
plans on Monday to fix nearly 4.5 million vehicles equipped with
faulty accelerators in North America and Europe. []
Toyota also said it would resume production of eight models
on Feb. 8 after a planned one-week shutdown at six plants in the
United States and Canada.
But the jump in its shares comes after about an 18 percent
tumble over the last seven business days, with investors
concerned about the long-term impact on earnings. Toyota is set
to report results on Thursday.
Among other automakers, Isuzu Motors <7202.T> shot up 5.2
percent to 203 yen after the Nikkei business daily reported the
truck maker's October-December operating profit is likely to have
topped 10 billion yen, a sharp reversal from a loss of 1.6
billion yen a year earlier.
Resource-linked stocks gained. Mitsui & Co <8031.T> climbed 6
percent to 1,370 yen and Mitsubishi Corp <8058.T> jumped 5.6
percent to 2,259 yen. Oil and gas field developer Inpex <1605.T>
gained 2.5 percent to 667,000 yen.
(Additional reporting by Elaine Lies; Editing by Chris
Gallagher)
