* Tokyo shares rise along with overseas peers
* Banking shares rebound, trim some of this month's losses
* Some cite technical flows ahead of futures settlement
* Trading volume picks up
By Masayuki Kitano
TOKYO, Sept 10 (Reuters) - Japan's Nikkei stock average rose
1.4 percent on Thursday after overseas equities rose in a sign of
improving risk appetite, with banking shares such as Mitsubishi
UFJ Financial Group <8306.T> rebounding following a recent slide.
High-tech glass maker Hoya Corp <7741.T> climbed after the
Nikkei business daily said the company appeared to be targeting
an operating profit of 50 billion to 55 billion yen, close to its
operating profit of 59 billion yen a year earlier.
Tokyo shares rose broadly, with advancing shares outnumbering
declining ones by more than 5 to 1, and exporters such as Toyota
Motor Corp <7203.T> and Sony Corp <6758.T> gained even though the
yen was stuck near a seven-month high against the dollar.
Market players said Tokyo stocks were taking their cue from
advances in global equities. On Wednesday, the U.S. Standard &
Poor's 500 <.SPX> hit an 11-month closing high, and Britain's
FTSE 100 index closed above the 5,000 level for the first time
since October.
Such broad gains point to an improvement in investor risk
appetite that bodes well for Japanese shares, said Nagayuki
Yamagishi, an investment strategist for Mitsubishi UFJ
Securities.
"There is a possibility that international portfolios might
be re-jigging allocations amid an improvement in risk appetite,"
Yamagishi said.
Global investors may be increasing allocations in stock
markets where they have underweight positions, such as British
and Japanese stocks, he added.
The Nikkei <> rose 140.37 points to 10,452.51. It rose
above its 25-day average, which lies near 10,400. The 25-day
moving average was seen as a key resistance level.
A rise to above 10,767.00 would take the Nikkei to an
11-month intraday high.
The broader Topix index <> gained 1.6 percent to 955.27.
Trade picked up, with 1 billion shares changing hands on the
Tokyo exchange's first section compared to last week's morning
average of 943 million.
"Tomorrow is the special quotation, so there are probably
some pretty strong moves to roll over positions," Yamagishi said,
adding that such technical factors could be contributing to the
increase in volume.
Volume in December Nikkei futures stood at 19,257 contracts
<JNIZ9>, already exceeding the previous day's volume and up from
6,112 on Tuesday.
Uncertainty about the pace of the global economic recovery in
coming months could temper gains in equities, said Hideyuki
Ishiguro, supervisor at Okasan Securities' investment strategy
department.
"A rapid recovery in the economy is likely to end. While
growth will remain positive, the pace of change will probably
slow," Ishiguro said.
Such concerns may limit gains in Tokyo shares, at least until
investors see upcoming corporate earnings, he said.
Fujifilm Holdings Corp <4901.T> rose 2.9 percent to 2,805 yen
after the Nikkei business daily said a Fujifilm unit has
developed technology that will increase the sensitivity of rapid
testing devices for influenza viruses by 100 times.
Banking shares rose, trimming some of the losses made since
the start of the month, with the banking sub-index climbing 2.8
percent <.IBNKS.T>.
Mitsubishi UFJ Financial Group rose 3.2 percent to 544 yen
and Mizuho Financial Group <8411.T> gained 3 percent to 206 yen.
Global moves toward stricter bank capital requirements have
stirred concerns about the potential for capital-raising by
financial institutions, weighing on banking shares recently, as
has a brokerage downgrade of the sector.
Under new rules proposed by top central bankers and
regulators earlier this month, banks will have to raise the
quality of their top-tier capital buffers, which must be mainly
common shares and retained earnings, and disclose their make-up.
[]
Toyota Motor rose 2.6 percent to 3,900 yen and Sony Corp rose
2.1 percent to 2,475 yen.
Tokyo shares seemed to shrug off data showing that core
machinery orders fell a bigger than expected 9.3 percent in July.
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