* Nikkei up 1.4 pct on Japan govt steps, US auto bailout
* Banks up on rate cut, measures to help financial system
* Toyota slips before n/conf, op loss forecasts expected
(Adds stocks, details)
By Aiko Hayashi
TOKYO, Dec 22 (Reuters) - The Nikkei average rose 1.4
percent on Monday, helped by Japanese government steps to
bolster an economy in recession, with investors also relieved
that struggling U.S. automakers won a $17.4 billion government
loan.
Bank shares including top lender Mitsubishi UFJ Financial
Group <8306.T> were among the biggest gainers after the Bank of
Japan on Friday cut its key policy rate to 0.10 percent from
0.30 percent and took other steps to ease corporate credit
strains. []
Trade was light on the Tokyo exchange as many investors
head for the holidays, while Japanese markets will be closed on
Tuesday for Emperor's Birthday.
"The market is growing hopeful about the situation as a
whole as the government looks willing to do everything it can
to stabilise the financial system, including a rate cut by the
BOJ and the announcement to buy commercial paper," said
Soichiro Monji, a chief strategist at Daiwa SB Investments.
Tokyo also joined governments worldwide in pledging
hundreds of billions of dollars of fiscal stimulus to lessen
the impact of the crisis on their economies, many of which,
Japan's included, are already in recession. []
Its extra 4.79 trillion yen ($54 billion) budget, approved
by the cabinet on Saturday, will help finance two
already-unveiled spending packages totalling 10 trillion yen.
"The U.S. autos bailout is also positive as it's better to
help the automakers than let them fail, but the bailout
conditions are pretty strict and trouble could resurface in
March," Monji said.
The benchmark Nikkei <> added 121.90 points to
8,710.42 after closing 0.9 percent lower on Friday. The broader
Topix <> climbed 1.5 percent to 847.20.
President George W. Bush bailed out U.S. automakers on
Friday with $17.4 billion in emergency loans as he sought to
stave off a collapse that would have cost hundreds of thousands
of jobs. []
But Bush attached a string of conditions to the 3-year
loans and set an end-March deadline for General Motors Corp
<GM.N> and Chrysler LLC [] to prove they can restructure
enough to ensure their survival or have the loans called back.
FINANCIALS GAIN
Mitsubishi UFJ gained 4.6 percent to 586 yen, while No.2
lender Mizuho Financial Group <8411.T> climbed 4.7 percent to
272,000 yen and Sumitomo Mitsui Financial Group <8316.T> jumped
5.1 percent to 411,000 yen.
Nomura Holdings <8604.T>, Japan's biggest brokerage, added
6.2 percent to 742 yen.
Toyota Motor Corp <7203.T>, which holds a year-end news
conference after the close on Monday, shed 2.8 percent to 2,820
yen.
The world's biggest automaker is likely to report its first
annual parent-only operating loss in 71 years, hit by plunging
sales and the soaring yen, Japanese media reported on Friday,
adding it is set to issue revised forecasts at the conference.
The Mainichi newspaper also said Toyota may cut its
dividend for this business year.
"The focus is whether the company will slash its dividend.
I can't predict how the market will react if that happens,
because it would mean the operating environment is seriously
bad," said Masayoshi Okamoto, head of dealing at Jujiya
Securities.
"Downward revisions of forecasts have been largely factored
in since last week, however."
Rival Honda Motor Co <7267.T> was up 4.5 percent at 1,888
yen and Nissan Motor Co <7201.T> added 1.4 percent to 300 yen.
Trade was thin on the Tokyo exchange's first section, with
642 million shares changing hands, compared with last week's
morning average of 898 million.
Advancing stocks outpaced decliners by more than 2 to 1.
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs & Ian
Geoghegan)
