Japan stocks up 1 pct as Tokyo Elec jumps, resources up

(Adds comment, stocks, details)

By Aiko Hayashi

TOKYO, April 15 (Reuters) - Japan's Nikkei stock average rose 1 percent on Tuesday as Tokyo Electron Ltd (8035.T) jumped on a brokerage upgrade, while resource-related shares such as trading house Mitsui Co Ltd (8031.T) climbed after oil hit a record closing high.

Investors returned to blue-chip issues such as Toyota Motor Corp (7203.T) and Takeda Pharmaceutical Co Ltd (4502.T), as they have become rather cheap, said Takahiko Murai, general manager of equities at Nozomi Securities.

"I'm seeing sporadic buying and short-covering after the Japanese market fell too sharply yesterday, but investors remain nervous ahead of this week's earnings announcements by U.S. banks and financial institutions," he said.

The rocky ride for the U.S. stock market is expected to continue this week, with earnings reports from JPMorgan Chase (JPM.N), Merrill Lynch MER.N, Citigroup (C.N) and other large banks and financial services companies, as well as reams of economic data.

The benchmark Nikkei average .N225 added 125.49 points to end the morning at 13,043.00. It fell 3.1 percent on Monday to book its lowest close since April 1.

The broader TOPIX index gained 1 percent or 12.39 points to 1,258.63.

On Monday, Wachovia Corp WB.N, the No.4 U.S. bank, said it would cut its dividend, eliminate jobs and raise capital of $7 billion, becoming the latest casualty of the global credit crunch. [ID:nN14343221]

"After the news about Wachovia, investors couldn't actively buy financials, but they now appear somewhat willing to buy on dips as they are factoring in weak results from the sector," said Zenshiro Mizuno, a senior managing director of the equity trading division at Marusan Securities.

Mizuno said investors have already factored in profit declines for Japanese steelmakers this year, shrugging off a newspaper report that Nippon Steel Corp (5401.T) and JFE Holdings Inc (5411.T) are likely to see double-digit falls in group pretax profit in the year to next March due to high raw material and energy costs. [ID:nT224729]

TOKYO ELECTRON IN FOCUS

Shares of Tokyo Electron advanced 4.5 percent to 6,050 yen, becoming the biggest positive contributor to the Nikkei 225, after Nomura Securities lifted its rating to "buy" from "neutral," citing signs of a recovery in the chip-making equipment industry as memory chip prices have started rising.

Advantest Corp (6857.T), the world's largest maker of microchip testers, climbed 3.6 percent to 2,760 yen.

Resource-related shares jumped after oil prices CLc1 rose to a record close on Monday on a weaker dollar and supply disruptions ahead of the U.S. summer driving-demand season.

Mitsui rose 2.1 percent to 2,460 yen, while Mitsubishi Corp (8058.T) climbed 2.3 percent to 3,590 yen and Itochu Corp (8001.T) gained 2.7 percent to 1,125 yen.