Nikkei up 0.9 pct as credit worries ease, Inpex jumps

(Updates to midday)

By Aiko Hayashi

TOKYO, May 7 (Reuters) - Japan's Nikkei stock average rose 0.9 percent on Wednesday to its highest in nearly four months as easing concerns about the credit crisis boosted financial shares such as Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz), while high-tech exporters and automakers climbed on a softer yen.

Resource-related shares such as Inpex Holdings (1605.T: Quote, Profile, Research, Stock Buzz) and trading houses jumped after oil shot to a record above $122 a barrel on Tuesday. [ID:nSIN170894]

Japanese markets were closed on Monday and Tuesday for national holidays.

"Foreign money is flowing into Japanese stocks such as banks, securities, real estate and commodity-related firms, on receding credit fears and the solid New York market," said Akihito Yamanoi, general manager of the equity investment department at AIG Global Investment Corp (Japan).

"Worries about the economic outlook still remain, but for now, risk money that was taken off the table due to overly pessimistic sentiment is partly returning to the market."

The benchmark Nikkei average .N225 ended the morning session up 130.23 points at 14,179.49, hitting its highest level since Jan. 15.

The broader TOPIX index gained 1.6 percent or 21.50 points to 1,398.89.