* Nikkei gains 2 pct, touches two-month high
* Tech shares surge on hopes for U.S. economic package
* Market may stay strong until Obama takes office
* Weaker yen boosts exporters
(Adds stocks, details)
By Elaine Lies
TOKYO, Jan 7 (Reuters) - Japan's Nikkei share average climbed
2 percent on Wednesday, touching a two-month high as tech shares
such as Kyocera Corp <6971.T> powered up on hopes for a U.S.
economic stimulus package, while exporters rose on a weaker yen.
Carmakers climbed, with Honda Motor Co <7267.T> surging more
than 9 percent as investors continued to buy up the beaten-down
sector, one of the poorest performers in 2008.
The Nikkei business daily reported that Japan's government
will seek to scrap capital gains taxes for foreigners investing
in Japanese companies through funds, which market players said
could be having some impact. []
But many also said gains might be limited by investor moves
to lock in profits at the highs out of a sense that the Nikkei,
which has risen for the past six trading days, may be overheated.
"Though the market may be sustained by hopes for the Obama
economic plan, around the time he takes office we'll start to see
a lot of company results coming out, and things could start to
get tough," said Takashi Ushio, head of the investment strategy
division at Marusan Securities.
"People say the market has factored in poor results, with
something like 20-30 percent of firms likely to show losses, but
what if that number rises to 40 percent? It's anyone's guess if
that's been factored in."
The dollar on Tuesday hit its highest against the yen since
Dec. 1, partly on expectations that a stimulus package planned by
U.S. President-elect Barack Obama will help the world's largest
economy emerge from recession sooner than other industrialised
nations. []
Others said risk appetite may be recovering a bit as
investors take a longer-term view, especially on the United
States.
"The United States certainly has a lot of economic problems
but they seem to be tackling them, whereas Japan doesn't seem to
be doing anything," said Koichi Ogawa, chief portfolio manager at
Daiwa SB Investments.
"Though the immediate future seems pretty dark people are now
looking towards 2010 and buying on expectations of recovery."
The benchmark Nikkei <> gained 182.31 points to 9,263.15
by the midday break after earlier rising as far as 9,325.35, its
highest since Nov. 6. The broader Topix <> gained 1.7
percent to 890.69.
CARMAKERS CLIMB, TECHS GAIN
Some in the market said gains could be powered by a slow
return of foreign investors, noting that hedge funds --
relentless sellers last year -- might be starting to get back in.
According to orders placed before the start of trade, foreign
brokers were set to be net buyers of Japanese stocks to the tune
of 14 million shares.
Hopes for a U.S. economic recovery were particularly at play
in the case of carmakers, helping many beaten-down shares extend
the sharp gains made earlier this week.
Honda rose 9.5 percent to 2,180 yen, bringing its gains so
far for 2009 to 14.4 percent. Toyota Motor Co <7203.T> rose 4.6
percent to 3,190 yen and Nissan Motor Co <7201.T> climbed 9.4
percent to 373 yen.
Tech shares were particularly strong performers after their
U.S. peers rose as investors bet the sector would benefit from
Obama's proposed package of spending and tax-cut measures that
would total nearly $775 billion over the next two years.
The Philadelphia Semiconductor Index <.SOXX> rose 5.1 percent
on Tuesday, lending strength to Tokyo shares.
Kyocera surged 7.4 percent to 7,270 yen, becoming the biggest
contributor to the Nikkei 225 by volume weight, followed by Canon
Inc <7751.T>, which gained 11.1 percent to 3,300 yen.
Advantest Corp <6857.T> climbed 7.5 percent to 1,642 yen and
Tokyo Electron <8035.T> gained 7.5 percent to 3,740 yen.
Blue-chip exporters rose across the board, with Sony Corp
<6758.T> up 6.8 percent at 2,265 yen and Panasonic <6752.T>
climbing 6.3 percent to 1,265 yen.
Ricoh Co Ltd <7752.T> surged 10.2 percent to 1,335 yen after
Credit Suisse upgraded the stock to "outperform" from "neutral"
and raised its target share price to 1,400 yen from 1,150 yen,
saying firmness in the North American market could counter
earnings concerns about its subsidiary Ikon.
Trade was active on the Tokyo exchange's first section, with
1.4 billion shares changing hands, compared with 975 million
shares logged on Tuesday morning.
Advancing stocks outpaced declining ones by more than 2 to 1.
(Reporting by Elaine Lies; Editing by Chris Gallagher)
