Japanese shares lifted by insurers, blue-chips

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By Elaine Lies

TOKYO, Feb 13 (Reuters) - Japanese share prices climbed more than 1 percent on Wednesday as Millea Holdings Inc (8766.T) and other insurers rose after an offer of help to U.S. bond insurers soothed market worries about credit problems.

Canon Inc (7751.T) and other blue-chip exporters rose, boosting the overall market, but gains were limited by uncertainty ahead of key Japanese and U.S. economic indicators including Japanese GDP on Thursday.

Billionaire investor Warren Buffett offered on Tuesday to reinsure $800 billion in municipal debts guaranteed by the top three U.S. bond insurers, soothing worries about fallout from the credit crisis and sending the Dow Jones industrials .DJI and S&P 500 .SPX higher [ID:nN12216014].

But CNBC reported that one of the three, Ambac Financial Group Inc (ABK.N), had already rejected the offer, reinforcing wariness among already sceptical Japanese market players.

"One has rejected the offer and the other two haven't responded yet, so there's still definitely doubts about how effective a measure this really is," said Noritsugu Hirakawa of the investment strategy section at Okasan Securities.

"Still, the fact that this offer has been made is a ray of light for the market."

Others said Buffett's offer did not cover the problem debt at the heart of the credit crisis and that much more stringent measures, such as fund injections, are needed to resolve the issue.

"Basically, the market's worries have been just temporarily lifted," said Takashi Ushio, head of the investment strategy division at Marusan Securities.

The benchmark Nikkei average .N225 rose 1.4 percent by midsession by 13,202.70, a gain of 180.74 points, while the broader TOPIX index rose 1.2 percent to 1,301.24.

Investors began sidelining themselves ahead of a raft of economic indicators and events later this week and trade was light as a result, with 935 million shares changing hands compared with last week's morning average of 1.05 billion.

Advancing shares outnumbered decliners by more than two to one.

FINANCIALS FORGE UP

Though Millea Holdings and other financials had trimmed their gains by midsession, all were still up after several days of slides -- especially on Tuesday, when worries about impending ratings cuts for the bond insurers sent them tumbling.

Millea Holdings, Japan's largest non-life insurer, rose 1.8 percent to 3,880 yen, while Mitsubishi UFJ Financial Group (8306.T) was up 1.6 percent at 958 yen and Sumitomo Mitsui Financial Group (8316.T) added 0.8 percent to 785,000 yen.