Nikkei rises to one-week high as yen softens, earnings surprise

* Weaker yen boosts exporters
* Strong financial earnings in the U.S. improves sentiment
* Chipmakers lose out after Intel disappoints

By Sophie Knight
TOKYO, Oct 17 (Reuters) - Japan's Nikkei share average
gained 1.3 percent on Wednesday morning as the yen eased to a
one-month low against the euro and dollar and as Goldman Sachs's
impressive revenues helped dampen fears about
disappointing earnings.
Exporters such as Toyota Motor Corp were given a
leg up after the yen hit 103.51 versus the euro as rating agency
Moody's stopped short of downgrading Spanish bonds to "junk"
status, affirming them at BAA3 in light of the ECB's promise to
buy the bonds if needed.
"The softer yen is the biggest factor today...This could be a
turning point, but it's really too early to tell," said Yasuo
Sakuma, portfolio manager and executive officer at Bayview Asset
Management.
"If the won and the euro continue to get stronger I think
sentiment might become a bit more 'risk on'," he added, as the
yen struck a 5-1/2 month low against the Korean currency.
A strong yen has prompted fears of further cuts to earnings
forecasts for exporters as it erodes their revenues garnered
abroad once repatriated. Its retreat on Wednesday helped Toyota
add 1.5 percent after the share dropped 3.6 percent last week.
Hitachi Ltd was up 2.9 percent and was the
third-most traded stock on the main board by turnover, just
behind Toyota, after JPMorgan reiterated its "overweight"
rating, saying it was likely to meet its 2012 operating profit
forecast.
Those gains helped the Nikkei advance 115.57 points
percent to 8,816.88, its highest level in a week and a bove its
14-day moving average at 8,741.81.
Following upbeat earnings from Citigroup Inc in the
previous session, Goldman Sachs beat expectations overnight as
its revenue more than doubled and it raised its quarterly
dividend.
The securities sector jumped 2.3 percent, and
even news that Nomura Holdings Inc will have to pay a
300 million yen ($3.8 million) fine for leaking information
could not dent its advance of 2.9 percent.
"I think that the weakness in the global economy and the
expectations of poor earnings were pretty much priced in last
week and now we're recovering from that sell-off," said Masayuki
Otani, chief market analyst at Securities Japan.
"Consensus cooled down quite a lot and now people are
realising it might have gone too far."

A YEN FOR BUYING
The benchmark dropped 3.7 percent last week, its biggest
weekly fall since May, after a stream of profit warnings sparked
fears of earnings coming in lower than expected, due to a global
slowdown, anti-Japanese sentiment and the robust yen.
Prime Minister Noda is to hold an extraordinary cabinet
meeting later in the day to instruct ministers to draw up an
emergency economic stimulus as the economy cools, according to
local media, including strategies to weaken the yen.
"It's hard to say without seeing the details of their plan
but they'll likely only have 1 trillion yen to play with... the
effect would therefore be limited," said Otani of Securities
Japan.
Although exporters feel the pain from a strong yen, some
Japanese firms have begun using the robust currency and low
borrowing rates to their advantage, snapping up foreign firms at
reasonable prices.
This trend was brought into focus by Softbank Corp's
$20 billion deal to buy a 70 percent stake in Sprint
Nextel Corp, announced this week.
The mobile provider, an index heavyweight, added 3.3 percent
on Wednesday morning to extend Tuesday's 9.6 percent rise on CEO
Masayoshi Son's assurance that the move would not dilute
Softbank shares. The shares dropped 20 percent over Friday and
Monday on uncertainty about how the deal would be funded.
Also on Wednesday, major trading house Mitsubishi Corp
added 0.8 percent after the Nikkei daily said it would
buy a 20 percent stake in Indonesian utility Star Energy for
$200 million, aiming to double capacity of a geothermal plant in
West Java by 2017.
Elsewhere, chipmakers sagged after Intel Corp, the
world's largest chipmaker, forecast gross margins for the
current quarter below expectations.
Tokyo Electron Limited, Ibiden Co Ltd and
Advantest Corp fell between 0.7 and 3.6 percent.
The broader Topix addded 1.1 percent to 740.78 in
relatively strong trade, with volume at 55.2 percent of its full
day 90-day average.