* Trading firms, steel, metal stocks up on commodity prices
* Banks jump helped by bullish views on US financial sector
* Yen weighs but optimism about earnings supports -analyst
By Aiko Hayashi
TOKYO, Oct 7 (Reuters) - Japan's Nikkei average rose 0.9
percent on Wednesday, with shares such as steel, metal stocks as
well as trading houses making strong gains in the wake of a jump
in commodity prices.
A rate hike from Australia, the first G20 country to raise
interest rates since the onset of the financial crisis, has
underscored for many that the global economy is on the mend,
spurring gains in energy and metal prices.
Bank shares like Mitsubishi UFJ Financial Group <8306.T> also
advanced on continued optimism about the U.S. financial sector,
while electronics conglomerate Hitachi <6501.T> soared on a
two-notch rating upgrade.
"An increasing number of brokers are turning bullish on U.S.
financial stocks and that's prompting investors to adjust
positions in Japanese financials that had lagged behind," said
Tsuyoshi Segawa, an equity strategist at Mizuho Securities.
Goldman Sachs upgraded this week the U.S. large-cap bank
sector, saying share prices for companies in the industry didn't
reflect their earnings power. The news has helped boost both U.S
and Japanese financial shares.
In moderate trade, the benchmark Nikkei <> gained 86.45
points to 9,778.25, after inching up 0.2 percent the previous
day. Last week, the index shed 5.2 percent, its worst weekly loss
in about three months.
The broader Topix <> added 1.3 percent to 883.12.
But worries about a stronger yen were capping gains, said
Yumi Nishimura, deputy general manager at Daiwa Securities SMBC.
"Even so, investors don't really want to sell too
aggressively as there's no serious concern about earnings both in
Japan and the United States ahead of the upcoming earnings season
and the markets could move higher," she said.
BANKS, TRADING HOUSES SHINE
Most gains in financials stocks were due to short-covering,
market players said.
Japan's top bank, Mitsubishi UFJ Financial Group, jumped 5.3
percent to 500 yen and Mizuho Financial Group <8411.T> added 2.7
percent to 189 yen. Nomura Holdings <8604.T>, the country's
biggest brokerage, rose 1.3 percent to 626 yen.
Shares of trading houses climbed as higher commodity prices
will positively impact their earnings, market players said.
Mitsubishi Corp <8058.T>, Japan's largest trading house, gained
5.3 percent to 1,855 yen and fellow trader Mitsui & Co <8031.T>
climbed 5.1 percent to 1,173 yen.
Metal stock Dowa Holdings <5714.T> jumped 6 percent to 544
yen while steelmaker JFE Holdings <5411.T> rose 5.3 percent to
3,060 yen.
Hitachi shot up 8.1 percent to 295 yen after Mizuho
Securities upgraded its rating to a "1" from a "3", saying the
company was highly likely to achieve its earnings targets partly
due to a strong performance for its hard disk drive business.
Murata Manufacturing <6981.OS>, an electronic parts maker,
advanced 3.2 percent to 4,170 yen after its president told
Reuters in an interview that orders in the quarter just ended
were stronger than expected. []
But Aeon Co <8267.T> lost 1.7 percent to 816 yen after
Japan's second-largest retailer posted a 40 percent decline in
its first-half operating profit, hit by weak consumer spending
and after analysts complained about a lack of disclosure at its
analysts' meeting. []
Some 1.1 billion shares changed hands on the Tokyo exchange's
first section, above last week's morning average of 928 million.
Advancing stocks outnumbered declining ones, 994 to 547.
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)
