* Nikkei adds 0.2 pct after Monday's 1.7 pct drop * Toshiba Tec jumps on report of IBM terminal unit buy * Gree surges after Merrill Lynch ups price target By Dominic Lau TOKYO, April 17 Japan's Nikkei share average recovered on Tuesday after the previous session's sharp losses, while Toshiba Tec Corp outperformed after a media report said it would buy IBM Corp's point-of-sale terminal business. Toshiba Tec, a unit of Toshiba Corp, jumped as much as 10.8 percent after the Nikkei newspaper said the Japanese firm would buy the IBM business for 70 billion yen ($870.9 million) and would strengthen its cloud computing services. Toshiba gained 0.9 percent. By the midday break, the Nikkei advanced 0.2 percent to 9,487.59 after shedding 1.7 percent on Monday, falling below the psychological key level of 9,500. "There are a lot of concerns in the global financial market but we don't see signs of contagion," said Hisao Matsuura, equity strategist at Nomura. Matsuura said Spain's banking system was stable and the situation was different from last year when concerns over Greece's default roiled financial markets. Data on Friday showed Spanish banks had increased their reliance on cheap loans from the European Central Bank as they were virtually shut from the wholesale credit market, raising fears that Spain would be further sucked into the euro zone debt crisis. The broader Topix was up 0.2 percent at 805.56 on Tuesday. Trading volume on the main board was thin after the halfway point, at less than 38 percent of its full daily average for the past 90 days. Japanese tech component makers were in demand after Bank of America Merrill Lynch raised its price targets on some stocks, including Murata Manufacturing Co Ltd, Taiyo Yuden Co Ltd, Hirose Electric Co Ltd and Kyocera Ltd . All four recorded gains of between 0.8 and 2.5 percent. Merrill Lynch also raised its price target on mobile social gaming firm Gree Inc and maintained its "buy" rating. The stock rose 6.8 percent and was the most heavily traded stock on the main board by turnover, in a likely short squeeze as data from Data Explorers showed more than 88 percent of the stock that is available to be borrowed had already been on loan as of April 13. A trader said investors concerned that the market is settling in a range with a break-out possible in either direction could buy both a Nikkei call and put spread to protect their positions. The Nikkei has fallen 5.9 percent so far this month after rallying more than 19 percent in January-March, its best first quarter performance in 24 years.