* Nikkei rebounds, up 1.6 pct from near 26-yr low
* Weaker yen helps buoy exporters
* Honda jumps on robust demand for new Insight hybrid cars
* Market cautious on impact of reported Japan stock buying
(Adds stocks, details)
By Aiko Hayashi
TOKYO, Feb 25 (Reuters) - Japan's Nikkei average gained 1.6
percent on Wednesday, after nearing a 26-year low the previous
day, buoyed by exporters on a softer yen and after a media report
that the Japanese government may buy shares from the market.
Honda Motor Co <7267.T> jumped nearly 7 percent after an
official said the automaker plans to produce more of its new
Insight hybrid cars from April. Honda has received orders for
almost three times its monthly sales target for the
gasoline-electric model it launched on Feb. 6 in Japan.
[]
Market players said investors took a positive viewed of the
government share buying report, but said it might be too early to
speculate about its impact, limiting further gains in the market.
Japan's finance minister said on Tuesday the government was
looking into expanding share buying to support the stock market
and the Nikkei business daily said this might include buying
directly from the market. []
"A rebound in U.S. stocks is playing a big part in the
market's gains, with the weaker yen providing additional
support," said Masaru Hamasaki, a senior strategist at Toyota
Asset Management.
"As for steps by the government, the market will likely take
a wait-and-see stance for a while as it just came up and it's
hard to evaluate its impact at this point."
Direct share buying would go much further than current
government share buying, which involves the Bank of Japan
purchasing shares held by banks. []
"It's good news, but what the market really wants is
large-scale economic measures, with the Japanese economy having
deteriorated the most among developed countries," said Takahiko
Murai, general manager of equities at Nozomi Securities.
"It (government stock buying) will likely be effective little
by little, but that won't improve the economy. The key is whether
we'll get big economic steps that can stop a further
deterioration."
The benchmark Nikkei <> added 115.35 points to 7,383.91,
while the broader Topix <> rose 1 percent to 737.86.
On Tuesday, the Nikkei booked its lowest close since Oct. 27,
after briefly touching 7,155.16 -- not far from a 26-year low
just under 7,000. The Topix posted its lowest close since
December 1983.
U.S. stocks rose more than 3 percent on Tuesday to snap back
from 12-year lows, after Federal Reserve Chairman Ben Bernanke
delivered a big dose of relief when he signalled that
nationalisation of big banks was not at hand. []
HONDA JUMPS, EXPORTERS GAIN
Exporters gained ground, receiving additional help from a
weaker yen, which boosts exporters' profits when repatriated.
The dollar inched up 0.1 percent to 96.76 yen <JPY=>. It
touched a three-month high of 96.94 yen on trading platform EBS
the previous day.
Honda surged 6.8 percent to 2,365 yen and was the top
positive contributor to the Nikkei 225, while Toyota Motor Corp
<7203.T> gained 3.2 percent to 3,190 yen and Canon Inc <7751.T>
jumped 5.5 percent to 2,485 yen.
Banking stocks gained after their recent battering. Japan's
top lender Mitsubishi UFJ Financial Group <8306.T> rose 1.4
percent to 435 yen and No.2 Mizuho Financial Group <8411.T>
gained 1.1 percent to 187 yen.
Kinki Nippon Tourist <9726.T> shot up 8.8 percent to 87 yen
after the company forecast a 100 million yen ($1.04 million) net
profit for the business year ending Dec. 31, citing expectations
of a rise in overseas travel prompted by lower fuel charges and a
stronger yen.
Trade was active on the Tokyo exchange's first section, with
1.03 billion shares changing hands, compared to last week's
morning average of 819 million.
Advancing stocks outnumbered declining ones 998 to 573.
(Reporting by Aiko Hayashi; Editing by Michael Watson)
