*Nikkei rises as oil's fall to six-week low buoys carmakers
*Banks rise on U.S. financial rescue hopes, but pare gains
*Some plants halted after earthquake, but impact limited
(Adds stocks, details)
By Elaine Lies
TOKYO, July 24 (Reuters) - Japan's Nikkei stock average
climbed 1.3 percent on Thursday, in sight of its highest close
since June, as Toyota Motor Co <7203.T> and other carmakers led
gains among exporters after oil prices fell to a six-week low and
the yen weakened.
Advantest Corp <6857.T> and other chip equipment firms sold
off earlier this week bounced back, while banks rose on relief
for troubled home financers Fannie Mae <FNM.N> and Freddie Mac
<FRE.N> after U.S. President George W. Bush dropped a threat to
veto a housing rescue bill.
A strong earthquake in northern Japan early on Thursday led a
handful of companies to halt production at plants in the affected
area, but one -- Nippon Steel Corp's <5401.T> Kamaishi Works --
had resumed by midday, and others were expected to restart soon.
Oil fell $4 on Wednesday, extending its losses to more than
$20 from the all-time peak above $147 a barrel hit on July 11 and
helping to buoy the dollar, which at one point on Thursday
touched a one-month high against the yen.
"The fundamental issue is oil, and this is helping the market
become cautiously optimistic," said Koichi Ogawa, chief portfolio
manager at Daiwa SB Investments.
"There's a sense that investors still lack confidence, but
the fall in oil has sparked some buying, and with banks likely
having hit bottom, optimism may grow."
Some market players said financials were likely to hold their
ground and provide support for the market at least into next week
but others said the impact of this strength could well be
limited.
"There's certainly some relief now regarding Freddie Mac and
Fannie Mae, but this is mainly just over the short term," said
Yutaka Miura, a senior technical analyst at Shinko Securities.
"A comprehensive solution hasn't yet been found, and this
will lead to uncertainty over the longer term."
The benchmark Nikkei <> gained 168.78 points to
13,481.71. The broader Topix <> rose 1.4 percent to
1,321.37.
DRIVEN BY AUTOS
Carmakers, which had seen sharp selling recently, powered
higher.
Honda Motor Corp <7267.T> rose 2.7 percent to 3,800 yen and
Toyota gained 3.7 percent to 5,050 yen, becoming the third- and
fourth-biggest contributors, respectively, to the Nikkei's rise
by volume weight.
Chip equipment makers, which tumbled earlier this week after
a brokerage cut its rating on the sector to "neutral" from
"bullish", rebounded.
Advantest surged 5.1 yen to 2,390 yen and Tokyo Electron Inc
<8035.T> climbed 2.8 percent to 6,240 yen.
Blue-chip exporters rose across the board, with Canon Inc
<7751.T> gaining 2.1 percent to 5,280 yen, Sony Corp <6758.T>
climbing 2.5 percent to 4,490 yen, and Kyocera Corp <6971.T>
rising 1.9 percent to 9,330 yen.
Banks had pared gains by midday but still remained in
positive territory, with Mitsubishi UFJ Financial Group <8306.T>
gaining 1.9 percent to 1,029 yen and No. 3 bank Sumitomo Mitsui
Financial Group <8316.T> up 0.7 yen to 883,000 yen.
Trade was moderate on the Tokyo exchange's first section,
with 858 million shares changing hands, in line with last week's
morning average. Advancing stocks outpaced declining ones by a
ratio of more than 6 to 1.
(Reporting by Elaine Lies)
