(Adds detail, stocks)
By Aiko Hayashi
TOKYO, May 29 (Reuters) - The Nikkei stock average rose 2.8
percent on Thursday, led by high-tech exporters as the yen
softened and further boosted by an unsubstantiated report that
North Korean leader Kim Jong-il may be dead.
The benchmark Nikkei was up nearly 2 percent when talk about
the Kim Jong-il report began to spread, a trader and a fund
manager said.
"The rumour prompted short-covering in the market on
receding worries about geopolitical risks," the trader said.
A little-known South Korean online news site reported Kim
Jong-il had been assassinated, quoting a highly placed Chinese
security official.
South Korea's National Intelligence Service said it had no
information to substantiate the report and was making further
checks.
North Korea's official media has had numerous reports this
week of Kim out in public for inspection tours and South Korea's
spy agency earlier this week denied a previous round of rumours
of Kim's death.
The Nikkei <> added 383.28 points to 14,092.72 after
falling 1.3 percent the previous day. It broke above the key
25-day moving average of 13,896.64.
The broader Topix index <> advanced 2.1 percent to
1,377.37.
The dollar steadied at 104.78 yen <JPY=>. It had hit a
two-week high of 105.32 yen in New York on Wednesday before
paring some of its gains.
Traders in the foreign exchange market around Asia have also
cited the Kim Jong-il talk, though it has had little impact on
currencies.
U.S. stocks rose on Wednesday after a government report on
orders for durable goods -- long-lasting manufactured items --
showed a surprising jump in business investment last month.
[]
"Durable goods data is a very volatile indicator and I doubt
the situation will improve just because they reported a big jump
this time," said Takahiko Murai, general manager of equities at
Nozomi Securities.
"If poor economic data were to come out, stocks would be
sold again. The overly optimistic views that the U.S. economy
will recover later this year may have to be corrected a9 percent to 5,090 yen,
industrial robot maker Fanuc Ltd <6954.T> advanced 3.9 percent
to 10,950 yen and Toyota Motor Corp <7203.T> added 3.4 percent
to 5,190 yen.
Investors had fretted over a stronger yen as it dents
exporters' overseas profits when they are brought back home.
Japan Steel Works Ltd <5631.T> gained 3.9 percent to 2,135
yen after Mitsubishi UFJ Securities lifted its target price for
the stock to 3,250 yen from 2,300 yen, citing potential global
demand growth for nuclear reactors.
In contrast, Mitsubishi UFJ Nicos <8583.T> skidded 6.3
percent to 374 yen after Mitsubishi UFJ Financial Group <8306.T>
set the share swap ratio for its buyout of the credit card unit,
valuing the credit firm at an 8 percent discount.
Mitsubishi UFJ was up 1.6 percent at 1,007 yen.
Trade was light on the Tokyo exchange's first section, with
896 million shares changing hands, compared with last week's
morning average of 1.1 billion.
Advancing shares beat declining ones by nearly 7 to 1.
(Editing by Brent Kininmont)
