Nikkei up 1 pct led by exporters after sell-off

(Updates to midmorning)

TOKYO, May 27 (Reuters) - Japan's Nikkei average rose 1 percent on Tuesday, rebounding from a two-week closing low hit the previous day, with stocks that fell sharply such as Sony Corp (6758.T) and other exporters regaining ground.

Bank shares, which had been also hit recently, gained, with top lender Mitsubishi UFJ Financial Group (8306.T) climbing 1.4 percent to 990 yen.

"Stocks rose on a rebound after investors sold them off somewhat too sharply yesterday, though the market lacks direction as overseas markets were closed," said Masaru Hamasaki, senior strategist at Toyota Asset Management.

Markets in the United States and Britain were closed on Monday for holidays.

"Uncertainty in the U.S. economy continues to concern the market, but investors seem to have started thinking U.S. housing problems won't directly impact Japan and won't spread globally. You can see that from relatively solid moves in the Japanese market last week, while U.S. markets did poorly," Hamasaki said.

As of 0043 GMT, the benchmark Nikkei average .N225 added 139.65 points to 13,829.84. It slid 2.3 percent on Monday to book its lowest close in two weeks.

The broader Topix index gained 1.1 percent or 14.46 points to 1,358.64.

For the past week, U.S. stocks booked their worst week in three months, dropping more than 3 percent, while Japan's Nikkei shed 1.5 percent.

Shares of Sony rose 1.2 percent to 4,970 yen and Toyota Motor Corp (7203.T) added 1.2 percent to 5,070 yen.

Toshiba Machine Co Ltd (6104.T) jumped 4 percent to 756 yen after Mitsubishi UFJ Securities lifted its rating to "1" from "2," saying a recovery is in sight for moulding machines for auto makers, in addition to continued growth of large machinery. (Reporting by Aiko Hayashi; editing by Sophie Hardach)