* Nikkei up 2.1 pct as banks, exporters gain
* Average earlier up nearly 3 pct, highest in over 2 months
* Hopes for U.S. bank plan boost confidence
* Nippon Steel climbs on big coking coal price cut
By Aiko Hayashi
TOKYO, March 24 (Reuters) - Japan's Nikkei average briefly
climbed nearly 3 percent to a more than two-month high on
Tuesday, buoyed by bank shares such as MUFG <8306.T> as a U.S.
plan to rid the banking sector of bad assets sparked hopes for
stability in the financial system.
Among strong individual gainers, Nippon Steel Corp <5401.T>
climbed 3.4 percent to 278 yen after a company official said the
firm had sealed a year-on-year discount of about 57 percent on
coking coal contracts with BHP Billiton Mitsubishi Alliance for
fiscal 2009/10. []
U.S. stocks leapt about 7 percent on Monday after Washington
gave details of its plan to purge toxic assets from bank balance
sheets, fuelling optimism about a revival in bank lending and
driving double-digit gains in financial shares. []
"The key point of the U.S. plan is that money may start
flowing again, helped by a push by the government. That sparked
hopes that the financial system will stabilise," said Masaru
Hamasaki, senior strategist at Toyota Asset Management.
"But unless we see signs of the recovery in the economy and
then corporate earnings, the Nikkei will find it hard to go above
the 9,000 mark."
The benchmark Nikkei <> advanced 2.1 percent to
8,385.88, after earlier rising as much as 2.6 percent to its
highest since Jan. 14.
Some market analysts said the Nikkei appears to be overheated
after it ended the previous day about 10 percent above the 25-day
moving average. It has risen about 19 percent from an intraday
low of 7,021.28 hit on March 10.
The Dow Jones industrial average <> jumped 6.8 percent on
Monday, also helped by an unexpected rise in housing sales, seen
as a key factor in spurring an economic recovery.
Tokyo's broader Topix <> added 1.9 percent to 806.30.
Trade was active on the Tokyo exchange's first section, with
1.3 billion shares changing hands, compared with last week's
morning average of 1 billion.
Advancing stocks outnumbered declining ones by more than 3 to
1.
BANKING SHARES JUMP
Shares of Mitsubishi UFJ Financial Group <8306.T>, Japan's
top lender, jumped 3.9 percent to 532 yen.
No.2 Mizuho Financial Group <8411.T> shot up 4.6 percent to
230 yen and Sumitomo Mitsui Financial Group <8316.T>, the
third-ranked bank, gained 4 percent to 3,950 yen.
Exporters gained as the dollar was trading around 97.30 yen
<JPY=>, well up from a low of 93.55 hit last Thursday, and the
euro climbed 0.8 percent to 133.58 yen <EURJPY=R> on trading
platform EBS, the highest since October. []
Investors welcome a weaker yen as it boosts exporters'
profits when repatriated.
Canon Inc <7751.T> jumped 4.2 percent to 2,875 yen, while
Toyota Motor Corp <7203.T> advanced 3.6 percent to 3,160 yen,
even after a newspaper reported that weaker-than-expected sales
had prompted the automaker to revise down its production plans in
Japan in May. []
Shares of machine tool maker Mori Seiki Co <6141.OS> added
4.4 percent to 980 yen a day after Gildemeister AG <GILG.DE>, the
world's biggest maker of cutting machine tools, said it had
forged an alliance with Mori Seiki to help it weather the
worldwide economic slump. []
(Reporting by Aiko Hayashi; Editing by Hugh Lawson)
