*Nikkei down 1.2 percent on uncertainty about bailout plan
*Firmer yen weighs on exporters
*Sumitomo Mitsui gains on report to invest in Goldman Sachs
*Nomura jumps on news to buy Lehman Asia, Europe units
*Mitsubishi UFJ rises after news to take stake in Morgan
(Adds stocks and comments)
By Aiko Hayashi
TOKYO, Sept 24 (Reuters) - The Nikkei average fell 1.2
percent on Wednesday amid fear that U.S. congressional wrangling
could delay a proposed $700 billion plan to rescue the financial
sector, while exporters such as Canon <7751.T> slid on a firmer
yen.
But the market pared earlier losses on hopes for a rebound on
Wall Street later in the day after a report that Sumitomo Mitsui
Financial Group <8316.T> may invest in U.S. investment bank
Goldman Sachs <GS.N>.
Market analysts said the decision by Warren Buffett's
Berkshire Hathaway to invest $5 billion in Goldman Sachs was also
lending support.
"The SMFG report is positive, making investors expect a
rebound in U.S. stocks on hopes for a stabilising financial
system," said Yutaka Miura, deputy manager of the equity
information department at Shinko Securities.
But analysts also said that uncertainty about the U.S.
bailout plan was still weighing on the market.
"The market is waiting for the bailout plan to be approved by
Congress, but things are not going as smoothly as initially
thought," said Katsuhiko Kodama, senior strategist at Toyo
Securities.
U.S. lawmakers scoffed at the huge size of the proposed
bailout and its lack of detail, and U.S. stocks closed down about
1.5 percent on Tuesday on the lack of certainty over when and how
Washington would act. []
The benchmark Nikkei average <> shed 140.19 points to
end the morning at 11,950.40. The broader Topix <> declined
1.3 percent to 1,153.65.
The Japanese market was closed on Tuesday for a national
holiday. The Nikkei had risen 1.4 percent to a one-week closing
high on Monday.
JAPANESE BANKS TO THE RESCUE?
Sumitomo Mitsui Financial rose 2.2 percent to 691,000 yen
after Kyodo news agency reported that Japan's third-largest bank
plans to invest in Goldman Sachs. []
Nomura Holdings <8604.T> climbed 4.8 percent to 1,499 yen
after Japan's top broker said it would buy the Asian and European
operations of failed U.S. investment bank Lehman Brothers
<LEHMQ.PK> to help it expand overseas. []
Mitsubishi UFJ Financial Group <8306.T> advanced 3.5 percent
to 929 yen after Japan's largest bank said it would take a stake
in U.S. investment bank Morgan Stanley <MS.N>. []
"Investors like Nomura's move as it showed the firm started
taking action to become the world's No.1 brokerage," said
Takahiko Murai, general manager of equities at Nozomi Securities.
"But investors are divided on Mitsubishi UFJ's investment in
Morgan as they don't know if it can acquire Morgan's expertise in
investment banking with the move and the brokerage may announce
appraisal losses in October."
Last week saw a dramatic reshaping of the financial landscape
as AIG <AIG.N> was bailed out, Lehman filed for bankruptcy and
Merrill Lynch <MER.N> was forced into partnership with Bank of
America <BAC.N>.
EXPORTERS DOWN
Blue-chip exporters fell as investors fret over a stronger
yen, which would curb exporters' overseas profits when they are
brought home.
Canon slid 3.9 percent to 4,180 yen and Honda Motor Co
<7267.T> lost 3.7 percent to 3,370 yen.
The dollar was little changed at 105.44 yen <JPY=> after
hitting a high of 105.90 yen.
Trade was light on the Tokyo exchange's first section, with
892 million shares changing hands, below last week's morning
average of 1.1 billion.
Declining stocks beat advancing ones by nearly 3 to 1.
(Reporting by Aiko Hayashi; Editing by Chris Gallagher)
