(Adds stocks, details)
* Nikkei up 2.2 pct, led by Honda, other exporters
* Market relieved after Fed signals no rush on rate hikes
* Airlines up on prospect of route cuts to lower costs
By Elaine Lies
TOKYO, Aug 6 (Reuters) - The Nikkei stock average powered up
2.2 percent on Wednesday, led higher by Honda Motor Corp <7267.T>
and other exporters on relief after signals from the U.S. Federal
Reserve that it is in no hurry to raise interest rates.
All Nippon Airways <9202.T>, Japan's second-largest airline,
rose after saying it may cut routes and its bigger rival Japan
Airlines Corp <9205.T> edged up after it was reported to be
following suit to cut costs as aviation fuel prices soar.
Oil's fall to a three-month low also buoyed the market,
though resource-linked shares such as Mitsubishi Corp <8058.T>
and other trading houses extended losses, with Mitsubishi down
7.6 percent this week alone.
"The Fed's actual rate decision was as expected, but its
statement appeared to suggest that inflation may start to ease
off naturally by the end of the year, making rate hikes
increasingly unlikely," said Nagayuki Yamagishi, strategist at
Mitsubishi UFJ Securities.
"Japanese stocks may be a bit behind the United States in
terms of a rebound, but now I think the Nikkei will try to catch
up."
He added that the Nikkei appeared to be moving within a box
from 13,000 to 14,000 and that the market's forays below 13,000
have grown increasingly brief, signalling growing investor
confidence.
But other market players were warier, with some saying
investors are waiting for Japanese company earnings later this
week for further clues about the economy's long-range health.
"It's still far too soon to be able to say whether this
situation will be just temporary or if there's actually been a
positive change in the market environment," said Hiroichi Nishi,
general manager at the equity division of Nikko Cordial
Securities.
The benchmark Nikkei <> gained 287.24 points to
13,201.90, while the broader Topix <> rose 1.8 percent to
1,269.93.
EXPORTERS ENERGISED
Exporters led the Nikkei higher as the dollar held firm near
seven-week highs against the yen. A weaker yen makes Japanese
goods more competitive overseas and boosts profits when they are
brought back home.
Topping the list was Canon Inc <7751.T>, which climbed 5
percent to 5,090 yen. It was followed by Honda, up 4.2 percent at
3,450 yen. Sony Corp <6758.T> rose 5.4 percent to 4,280 yen.
Another standout was Konami Corp <9766.T>, which jumped 6.4
percent to 3,660 yen after the video game maker posted a 65.6
percent rise in its first quarter operating profit, buoyed by
robust sales of "Metal Gear Solid 4," and JPMorgan raised its
rating to "overweight" from "neutral."
All Nippon Airways said it may trim services on about 10
domestic and international routes, while the Nikkei business
daily said Japan Airlines planned to cut flights on 21 routes,
including services to London.
Such a cut by Japan Airlines, which declined to comment on
the report and said it would many any announcement when it issues
results on Thursday, was projected to save the airline 12
billion-13 billion yen ($111 million-$120 million) a year, the
Nikkei said.
ANA gained 2.5 percent to 409 yen, and JAL edged up 0.5
percent to 223 yen.
Among the day's losers were trading houses, with Mitsubishi
Corp down 0.7 percent to 2,900 yen and Mitsui & Co <8031.T> down
0.9 percent to 1,886 yen.
Trade picked up, with 974 million shares changing hands,
compared with last week's morning average of 834 million.
Advancing shares outnumbered declining ones by more than six
to one.
(Reporting by Elaine Lies; Editing by Hugh Lawson)
