Nikkei jumps 2.9 pct on yen as Dubai jitters ease

* Nikkei boosted by short-covering of banks, exporters

* U.S. data on jobs, Christmas shopping season eyed -analysts

* Rises to be limited near 9,600 by profit-taking -analyst

By Aiko Hayashi

TOKYO, Nov 30 (Reuters) - Japan's Nikkei average gained 2.9 percent on Monday, with bank shares surging as concerns about debt default in Dubai eased, while Canon Inc (7751.T) and other exporters gained after the yen retreated from a 14-year high on the dollar.

Signals were mixed on how long the flight to less risky assets might last, with U.S. shares coming back up off their lows by the end of a short trading day on Friday as some market players said worries about Dubai had been offset by the desire of investors to take profits as the year-end approaches.

Dubai's crisis exploded last week when the emirate, known for flashy lifestyles and the world's tallest building, said it would delay payment on debt issued by one of its flagship firms, angering investors and sending global markets sharply lower. [ID:nGEE5A02FN].

"There's a growing view in the market that places such as Abu Dhabi could help out Dubai, and that Dubai's debt problems might turn out to be temporary," said Fumiyuki Nakanishi, manager at SMBC Friend Securities.

Abu Dhabi, wealthy capital of the United Arab Emirates, will "pick and choose" how to assist debt-laden neighbour Dubai, a senior official said on Saturday. [ID:nGEE5AR032]

In active trade, the benchmark Nikkei .N225 climbed 264.03 points to 9,345.55, regaining much of the ground it lost on Friday when it was hit by the yen's appreciation to a 14-year high against the dollar and concerns about Dubai.

The broader Topix .TOPX advanced 3.6 percent to 839.94.

The Nikkei hit a four-month closing low on Friday, marking its fifth straight week of losses -- a run unseen since June-July 2008. The index fell 6.9 percent for the month of November.

Market players said the Nikkei had been sharply oversold last week and that this led to broad short-covering, including some buying by day traders.

But Mitsubishi UFJ Securities strategist Nagayuki Yamagishi said the Nikkei's gains were likely to slow as it neared 9,600, with investors eager to take profits as the end of the year approaches.

"Markets are also looking to U.S. indicators for clues, especially data on the Christmas shopping season, which should start to become clearer as the week goes on," he added.

American consumers shopped for more bargains at the start of the U.S. holiday season and spent significantly less per person than a year ago, according to early data on shopping trends over last weekend. [ID:nN27424281]

BANKS GAIN GROUND, EXPORTER BOOSTED BY YEN

Banks gained on short-covering after recent extended losses due to worries that other banks might follow Mitsubishi UFJ Financial Group (8306.T) and raise capital, with Dubai having added to the downward pressure.

MUFG shot up 8.6 percent to 482 yen, No. 2 bank Mizuho Financial Group (8411.T) surged 9.5 percent to 162 yen.

Banks outside the Gulf have said they were not heavily exposed to Dubai debt. Japanese financial institutions, including the three major banks, face loan exposures of about $1.2 billion in Dubai, the Nikkei business daily reported on Saturday. [ID:nBNG111007]

But more news from Dubai will continue to be eyed, with Dubai's Nakheel, developer of man made islands in the shape of palms, saying on Monday it has asked for three of its listed Islamic bonds, or sukuk, on Nasdaq Dubai to be suspended until it is in a position to inform the market more fully. [ID:nGEE5AT01F]

Exporters got an additional boost after the yen retreated, with it trading around 86.30 yen to the dollar, well off a 14-year low of 84.82 yen hit on Friday on EBS.

Canon advanced 4.1 percent to 3,330 yen and Toyota Motor Corp (7203.T) climbed 4.2 percent to 3,440 yen.

Sumitomo Corp (8053.T) jumped 4.7 percent to 850 yen after Credit Suisse lifted its rating on the trading house to "outperform" from "neutral", saying the stock looks heavily undervalued.

In the latest domestic capital raising, Miyazaki Bank (8393.T) plunged 19.7 percent to 309 yen after it announced it would raise up to 12.2 billion yen in a share issue that could lift its number of shares outstanding by 20 percent.

Some 2.5 billion shares changed hands on the Tokyo exchange's first section, above last week's daily average of 2 billion.

Advancing shares outnumbered declining ones by 11 to 1. (Additional reporting by Elaine Lies; Editing by Edwina Gibbs) ((aiko.hayashi@thomsonreuters.com; Reuters Messaging: aiko.hayashi.reuters.com@reuters.net; +81 3 6441 1802)) ((If you have a query or comment on this story send an email to news.feedback.asia@thomsonreuters.com)) ((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra : visit topnews.session.rservices.com * BridgeStation: view story .134 * Reuters Plus: from your WebDSS screen For more information on Top News, visit topnews.reuters.com))