Nikkei climbs 1.5 pct, banks and exporters gain

                                
 * Nikkei gains 1.5 pct, trade moderate before BOJ and Fed
                                
 * Banks cheered by overseas news but uncertainty remains
                                
 * Exporters climb as yen edges down against dollar
                                
 * Hitachi up after reshuffle, restructuring announcement
                                
 By Elaine Lies
 TOKYO, March 17 (Reuters) - The Nikkei stock average rose 1.5
percent on Tuesday, as banks like Mizuho Financial Group <8411.T>
extended gains on improved sentiment about the global financial
system and hopes for fresh policy steps from Japan's government.
                                
 Exporters also advanced on a weaker yen, but gains were
capped after Wall Street snapped a four-day rising streak, hurt
when American Express Co <AXP.N> said the number of people
struggling to make credit card payments had grown.
                                
 Hitachi Ltd <6501.T> rose 1 percent, erasing earlier losses,
after tapping a power business veteran as its new CEO and saying
it would split-off its ailing automotive and consumer units as it
races to restructure its sprawling operations. [ID:nT254512]
                                
 Market analysts said that while the Nikkei is unlikely to
test a 26-year low just under 7,000 any time soon, much
uncertainty lingers.
                                
 Bank of America <BAC.N>, Citigroup <C.N> and JPMorgan Chase &
Co <JPM.N> have said they were in the black for this year, while
British bank Barclays Plc <BARC.L> said on Monday it made a
strong start to 2009. [ID:nN12368897]
                                
 "We still can't really relax, since we won't know the full
details of their profits until quarterly results come out, and
there's still a lot of uncertainty," said Takashi Ushio, head of
the investment strategy division at Marusan Securities.
                                
 "But they do seem to have pulled back from the worst danger."
                                
 Expectations for fresh Japanese government policies,
including possible stock-buying steps and possible purchases of
subordinated debt issued by banks to help bolster their capital,
were providing support. [ID:nT129734] 
But April and May could be rough months for equities markets
as companies in both nations start announcing results. The
Japanese business year ends on March 31.
                                
 "We're going to have to see results to really know what's
going on, both in Japan and America, with investors focusing
mainly on forecasts for the next business year -- and this could
prove very bad," said Nagayuki Yamagishi, strategist at
Mitsubishi UFJ Securities.
                                
 "It's a question of whether current hopes will be betrayed,
or not."
                                
 The benchmark Nikkei <.N225> gained 114.67 points to
7,818.82, while the broader Topix <.TOPX> rose 1.5 percent to
752.59.
                                
 BANKS FORGE UPWARDS
Banks took heart from rises by Bank of America and Citigroup
<C.N>, but overall trade was moderate as investors waited for
results from two-day meetings of the Bank of Japan and the
Federal Reserve, both of which start on Tuesday.
                                
 Mitsubishi UFJ Financial Group <8306.T> rose 3.4 percent to
456 yen and Mizuho Financial Group <8411.T> gained 3.7 percent to
196 yen. Sumitomo Mitsui Financial Group <8316.T> rose 5 percent
to 3,170 yen.
                                
 The dollar edged up 0.2 percent to 98.38 yen <JPY=>,
supporting the exporters. [FRX/] <FXNEWS>
                                
 Honda rose 2.2 percent to 2,295 yen and Canon Inc <7751.T>
gained 1.2 percent to 2,625 yen.
Toyota Motor Corp <7203.T> rose 3.1 percent to 3,030 yen. The
Nikkei business daily reported that the company plans to slash
the price of its current generation Prius hybrid car by 19
percent to 1.89 million yen ($19,250), matching rival Honda's
hot-selling Insight.
                                
 Hitachi, which is facing a $7.1 billion loss, rose 1.1
percent to 266 yen.
"While the new management team and restructuring proposal are
an improvement in terms of speed, Hitachi's core businesses are
unclear and measures to improve its sector standing in our view
look weak," UBS analyst Hitoshi Shin wrote in a note to clients.
                                
 "No earnings improvement is likely aside from that due to
improved external conditions."
                                
 Still, UBS maintained a "neutral" rating on the stock and
kept the price target unchanged at 260 yen after the news.
                                
 Trade was moderate on the Tokyo exchange's first section,
with 954 million shares changing hands, compared with last week's
morning average of 1 billion.
                                
 Advancing stocks outpaced declining ones by more than 2 to 1.
  (Reporting by Elaine Lies; Editing by Edwina Gibbs)