*Nikkei rises 1.8 percent, Topix gains 2.1 percent
*Exporters benefit from a softer yen
*Investors pick up banks after a recent sell-off
(Adds stocks, details)
By Aiko Hayashi
TOKYO, Aug 18 (Reuters) - The Nikkei average rose 1.8 percent
on Monday as a softer yen buoyed exporters, while bank shares
such as top lender Mitsubishi UFJ Financial Group <8306.T>
climbed as investors picked them up after a recent sell-off.
Construction machinery maker Komatsu Ltd <6301.T> jumped
nearly 5 percent after Nikko Citi raised its rating to "buy/high
risk" from "hold/high risk," saying resource-rich countries were
expected to continue to drive earnings in the face of mounting
risk from a global slowdown.
"Stocks are up on short-covering. Investors moved to pick up
stocks as the Nikkei average got closer to a recent trough at the
12,900 level," said Yutaka Miura, deputy manager of the equity
information department at Shinko Securities.
The benchmark Nikkei <> added 231.06 points to 13,250.47
by the end of morning trade, after losing 1.1 percent last week.
The broader Topix <> climbed 2.1 percent to 1,273.68.
The dollar rose to its highest level against the yen since
early January on Friday, hitting 110.67 yen <JPY=>. It was down
0.2 percent to 110.26 yen on Monday.
Still, Takahiko Murai, general manager of equities at Nozomi
Securities, said fears about a global economic slowdown are
bound to hurt Japan's exporters.
"The global economy is generally headed downward... U.S.
domestic consumption is slowing, and that means Japan's exports
to the country are on the decline," he said.
Investors are also watching a monetary policy meeting by the
Bank of Japan that starts on Monday and ends on Tuesday.
The central bank is expected to downgrade its view of the
economy in a signal that crumbling export markets can no longer
offer factories enough business to keep Japan out of recession.
[]
EXPORTERS, BANKS GAIN
Sony Corp <6758.T> rose 2.8 percent to 4,360 yen and
electronics parts maker Kyocera Corp <6971.T> added 2.6 percent
to 9,660 yen.
Bank shares gained largely due to short-covering, Shinko's
Miura said.
Top lender Mitsubishi UFJ jumped 3.7 percent to 848 yen,
while No.2 Mizuho Financial Group <8411.T> advanced 2.6 percent
to 478,000 yen and Sumitomo Mitsui Financial Group <8316.T>, the
third-biggest bank, climbed 3.5 percent to 708,000 yen.
Komatsu shares shot up 4.9 percent to 2,470 yen.
Sumitomo Metal Industries Ltd <5405.T> jumped 6.7 percent to
478 yen after Mitsubishi UFJ Securities lifted its rating on the
stock to "2" from "3", saying the steelmaker was expected to be
able to raise prices of its seamless pipes used in the oil
industry.
Trade was light on the Tokyo exchange's first section, with
865 million shares changing hands, below last week's morning
average of 910 million.
Advancing stocks beat declining ones by nearly 10 to 1.
(Reporting by Aiko Hayashi)
