Nikkei up 0.5 pct on hopes for US stimulus plans

                                
 * Nikkei rises 0.5 pct, extending Monday's over 5 pct gain
                                
 * Exporters, machinery makers gain on US stimulus plans
                                
 * Nintendo climbs on strong Wii sales
 (Adds stocks, details)
                                
 By Aiko Hayashi
                                
 TOKYO, Dec 9 (Reuters) - The Nikkei average rose 0.5 percent
on Tuesday, buoyed by exporters such as Honda Motor Co <7267.T>
on optimism for U.S. economic plans and a government bailout of
the "Big Three" automakers.
                                
 Komatsu <6301.T>, the world's second-largest maker of
earth-moving equipment, and other construction machinery shares
extended Monday's gains on hopes for U.S. President-elect Barack
Obama's infrastructure spending plan.
                                
 "Expectations for Obama's administration were reflected
positively also in the Japanese market," said Fumiyuki Nakanishi,
manager at SMBC Friend Securities.
                                
 "But the Nikkei average was pushed back when it neared 8,500
ahead of the settlement of Nikkei futures and options contracts
later this week."
                                
 The benchmark Nikkei <.N225> added 40.38 points to end the
morning at 8,369.43, after rising as much as 2 percent earlier.
It shot up over 5 percent the previous day.
                                
 The broader Topix <.TOPX> gained 0.7 percent to 817.88.
                                
 The closely watched settlement price, known in Japan as the
special quotation or "SQ," is calculated from the opening prices
of the 225 shares in the Nikkei average on the second Friday of
the month.
                                
 Kazuhiro Takahashi, general manager at Daiwa Securities SMBC,
said data showing Japan's economy shrank more than initially
estimated in the third quarter also helped put a brake on further
gains in the market, coupled with uncertainty over Obama's plans.
[ID:nT280072]
                                
 "Still, there's a sense of relief because the Big Three
automakers will likely manage to survive. If they were to fail,
that would have led to a further deterioration in the economy,"
he said.
                                
 "On the whole, we have optimism for now."
                                
 U.S. stocks rallied to their highest level in a month on
Monday on optimism that Obama's proposed infrastructure spending
could limit the depth of the recession and on hopes for the
bailout of the three automakers -- GM <GM.N>, Ford <F.N> and
Chrysler <CBS.UL>. [ID:nN05458678]
                                
 Obama has started by asking his economic team to come up with
a plan to create at least 2.5 million new jobs by 2011. Congress
is also expected to pass a hefty new economic stimulus bill in
January that could be ready for Obama's signature immediately
after he is sworn in.
                                
 Meanwhile, the White House reviewed a Democratic plan on
Monday to bail out stricken automakers with up to $15 billion in
loans, a move that would also clear the way for longer-term help
if industry meets certain conditions. [ID:nN07466561]
                                
 EXPORTERS LEAD, NINTENDO JUMPS
                                
 Shares of Honda jumped 3.4 percent to 1,795 yen and Toyota
Motor Corp <7203.T> added 1.3 percent to 2,765 yen, while Sony
Corp <6758.T> advanced 3.5 percent to 1,889 yen.
                                
 Komatsu climbed 5 percent to 1,057 yen and Kubota <6326.T>
shot up 6.3 percent to 554 yen. Hitachi Construction <6305.T>
jumped 5.7 percent to 1,018 yen.
                                
 Construction companies powered gains on Wall Street on
Monday, with Caterpillar <CAT.N> surging almost 11 percent.
                                
 Shares of Mitsubishi UFJ Financial Group <8306.T> gained 8.1
percent to 465 yen after Japan's largest bank said its planned
capital raising will bring in about $8.6 billion, replenishing
funds after losses on its equity portfolio and an investment in
Morgan Stanley <MS.N>. [ID:nT322471]
                                
 Other notable stocks were Sumco Corp <3436.T> and Nintendo Co
<7974.OS>.
                                
 Silicon wafer maker Sumco shot up 6.9 percent to 924 yen
after the Nikkei business daily said the firm has decided to
spend an additional 17 billion yen ($183.2 million) to boost
output capacity for solar wafers at a 14.5 billion yen plant
under construction in Japan.
                                
 Shares of Nintendo jumped 4 percent to 33,650 yen after it
said sales of its Wii game console more than doubled during the
week of the Thanksgiving holiday in the United States, apparently
defying the retail gloom brought about by the global economic
crisis. [ID:nT338918]
                                
 Trade was active on the Tokyo exchange's first section, with
912 million shares changing hands, compared with last week's
morning average of 791 million.
Advancing shares outpaced declining ones, 839 to 715.
 (Reporting by Aiko Hayashi)