Japan shares jump 3 pct as Bear Stearns nerves ease

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By Taiga Uranaka

TOKYO, March 19 (Reuters) - Japan's Nikkei share average jumped 2.8 percent on Wednesday, tracking steep gains on Wall Street after solid results from two top investment banks soothed investor nerves after Bear Stearns' sudden downfall.

The dollar's overnight gains also helped exporters, with digital camera maker Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) rising more than 7 percent and Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) up nearly 6 percent.

Takeda Pharmaceutical Co (4502.T: Quote, Profile, Research, Stock Buzz) rose after a source said Japan's largest drug maker plans to buy out Abbott Laboratories Inc's (ABT.N: Quote, Profile, Research, Stock Buzz) stake in their 50-50 U.S. joint venture for 500 billion yen ($5 billion).

Still, gains may be limited ahead of a national holiday on Thursday, when Tokyo markets will be closed, and as turmoil in the global credit market is seen far from over.

"The biggest reason for Wall Street's gain is Lehman's earnings. The market has been in fear about who's going to be next after Bear Stearns," said Kenichi Hirano, operating officer at Tachibana Securities.

Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) and Lehman Brothers LEH.N posted lower quarterly earnings on Tuesday, but both topped forecasts, reassuring investors that bank profits were intact despite the escalating credit crisis.

But Hirano said a sustained rally was unlikely, with investors also holding off ahead of the holiday.