Japan stocks gain as Softbank jumps on Yahoo bid

(Updates to midafternoon)

TOKYO, Feb 4 (Reuters) - Japanese stocks are poised to post a 2-week closing high on Monday as Microsoft Corp's (MSFT.O: Quote, Profile, Research, Stock Buzz) $44.6 billion bid for Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz) buoyed Softbank Corp (9984.T: Quote, Profile, Research, Stock Buzz), while the prospect of that large-scale deal improved overall market sentiment.

Yahoo Japan Corp (4689.T: Quote, Profile, Research, Stock Buzz), which is owned 41 percent by Softbank and 33 percent by Yahoo Inc, was awash with buy orders coming in at 46,000 yen, up 9.5 percent from Friday's close.

Softbank holds a 3.9 percent stake in Yahoo Inc. Japan's financials and insurers such as Millea Holdings Inc (8766.T: Quote, Profile, Research, Stock Buzz) also powered up following reports of potential rescue plans for large U.S. bond insurers that have been battered by the global credit crunch.

"The Microsoft news is improving market sentiment as it hasn't seen global M&As of this magnitude for a while. The bid amount is ridiculously huge and the premium is also large," said Soichiro Monji, a chief strategist at the equity management department at Daiwa SB Investments.

"Another underlying impetus for the gains are the lack of bad news related to subprime problems for now with U.S. bank earnings mostly over and rescue plans for monoline insurers."

As of 0412 GMT, the benchmark Nikkei average .N225 was up 2.4 percent at 13,817.90, paving the way to post its highest close since Jan. 18.

The broader TOPIX index was up 2 percent at 1,363.72.

Softbank, which owns 3.9 percent of Yahoo Inc in terms of voting rights, shot up 14.2 percent to 2,175 yen.