Nikkei gains as weak yen boosts exporters; JAL soars

TOKYO (Reuters) - Japan's Nikkei stock average rose 1 percent on Monday, with exporters such as Honda Motor Co (7267.T) up on a weaker yen after U.S. jobless claims data strengthened hopes for a steady economic recovery.

The Tokyo Stock Exchange TSE.UL appeared to have a smooth launch for its $145 million "Arrowhead" trading system, as Asia's biggest bourse targets a dramatic increase in speed to revive its business and reputation.

Japan Airlines Corp 9205.T soared 31 percent after media reported that the state-owned Development Bank of Japan would double its credit line for the struggling airline to 200 billion yen ($2.2 billion).

"Though U.S. stocks dipped on the last trading day of the year, the economic data was better than expected and suggests a steady economic recovery, cheering the dollar in particular," said Masayoshi Yano, senior market analyst at Meiwa Securities.

The benchmark Nikkei .N225 gained 111.24 points to 10,657.60 after booking gains of 19 percent for 2009, compared to a 42 percent plunge in 2008.

The broader Topix .TOPX rose 0.9 percent to 915.93.

Market players reported no troubles with the new Arrowhead system, which is able to process trades in 5 milliseconds, 600 times faster than the 2 to 3 seconds needed on the current system, and roughly the same speed as the New York and London stock exchanges.

"There's no problems at this point, though the system will take a little getting used to. But for most investors, there won't be any change," said Masayoshi Okamoto, head of dealing at Jujiya Securities.

He said trading volume seemed on the light side with Japanese institutional investors apparently waiting to watch how the system performs, adding that if things continue to run smoothly they are likely to step in later in the day.

U.S. stocks ended 2009 on Thursday with their best gains since 2003, driven by optimism about the economy's recovery and a brighter outlook for profits. .N

A Thursday report that Americans filed fewer jobless claims in the latest week than at any time in 17 months added to expectations, prompted by a recent string of strong economic data, that the U.S. Federal Reserve could raise interest rates sooner than expected, helping to boost the dollar. <USD/>

"Traders are already looking forward to the U.S. jobs data due out at the end of this week, and there's some talk of high expectations for the figures possibly pushing the dollar higher," said Jujiya's Okamoto.

The dollar rose as far as 93.15 yen on trading platform EBS on Thursday, although it edged lower to 92.88 yen by mid-morning.

Honda gained 1.5 percent to 3,160 yen and Tokyo Electron (8035.T) rose 1.4 percent to 6,000 yen, while Sony Corp (6758.T) gained 1.6 percent to 2,712 yen.

Shares of JAL were up 31.3 percent at 88 yen after surging as high as 93 yen. The stock lost a quarter of its value on Wednesday, the last trading day of 2009, on expectations it would face bankruptcy as part of a state restructuring plan.

The state-owned Development Bank of Japan said the government had asked it to double its credit line for JAL to 200 billion yen to provide it with funding while a state-backed turnaround fund decides whether to bail out the airline.

A spokesman for the DBJ said the bank was considering the government's request.

(Reporting by Elaine Lies; Editing by Edwina Gibbs)