Nikkei rises 0.9 pct, weaker yen boosts exporters

                                
 * Nikkei gains 0.9 pct after falling 4.5 pct on Monday
                                
 * Yen's fall vs dollar helps exporter shares
                                
 * IHI surges 9.3 pct on upward earnings revision
                                
 By Rika Otsuka
                                
 TOKYO, March 31 (Reuters) - Japan's Nikkei average rose 0.9
percent on Tuesday as a weaker yen prompted investors to buy
exporters such as Honda Motor Co <7267.T>, a day after Tokyo
shares slid sharply on fears of bankruptcy for U.S. automakers.
                                
 IHI Corp <7013.T>, a heavy machinery maker, surged 9 percent
after lifting its operating profit estimate for the year ending
on Tuesday more than threefold.
                                
 "Investors bought back exporters as the yen has given back
the gains it made yesterday," said Yutaka Miura, senior technical
analyst at Shinko Securities.
                                
 "The issue of GM and Chrysler is unlikely to spark heavy
stock selling again, though it may cap gains," he said.
                                
 U.S. stocks tumbled on Monday as General Motors Corp <GM.N>
and Chrysler LLC took a step closer to potential bankruptcy, and
a spate of European bank rescues heightened concerns over the
financial system's health. [.N]
                                
 Despite slipping in early trade after Wall Street fell, the
benchmark Nikkei <.N225> climbed 72.75 points to 8,308.83.
                                
 It plunged 4.5 percent on Monday, its biggest one-day fall in
over 2 months.
                                
 The Nikkei is nearly 1,300 points or 18 percent above a
26-year closing low of 7,054.98 posted on March 10.
                                
 "The Nikkei has strong support around the 8,000 level," said
Terushi Hirotama, head of trading at Ichiyoshi Securities.
                                
 "But it is also hard for market players to push it up to the
9,000 level unless there are signs of the Japanese economy
bottoming out."
                                
 Japan's Prime Minister Taro Aso is expected to unveil an
outline of a new stimulus package on Tuesday, ahead of the
gathering of the Group of 20 rich and major developing countries
on Thursday in London, where the leaders will tackle the worst
economic crisis since 1930s.
                                
 Aso will hold a news conference from 5.00 p.m. (0800 GMT).
                                
 The broader Topix <.TOPX> edged up 0.1 percent to 790.38.
                                
 EXPORTERS REBOUNDS
                                
 Kyocera Corp <6971.T> and other exporters rose as the yen
weakened beyond 98 yen <JPY=> per dollar, buoyed by Japanese
investor demand for dollars on the last day of Japan's business
year. [FRX/]
                                
 The world's biggest automaker Toyota Motor Corp <7203.T> was
up 1.3 percent to 3,180 yen and Honda Motor Co <7267.T> rose 1.1
percent to 2,325 yen. Electronics parts maker Kyocera advanced
1.2 percent to 6,580 yen.
                                
 Shares of Mitsubishi UFJ Financial Group <8306.T>, Japan's
top lender, edged up 0.4 percent to 490 yen, while No. 3 Sumitomo
Mitsui Financial Group <8316.T> added 0.6 percent to 3,540 yen as
investors bought back stocks battered in Monday's sell-off.
                                
 IHI Corp climbed 9.3 percent to 118 yen after lifting its
operating profit estimate to to 20 billion yen ($205 million)
from 6 billion yen.
                                
 Volume fell off slightly, with 1.04 billion shares traded on
the Tokyo exchange's first section compared with last week's
morning average of 1.06 billion. Declining shares outnumbered
advancing ones, 867 to 690.
 (Reporting by Rika Otsuka; Editing by Edwina Gibbs)