Japan's Nikkei rises to 6-wk high, insurers strong

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By Elaine Lies

TOKYO, Feb 26 (Reuters) - Japanese shares were up on Tuesday after insurers such as Millea Holdings (8766.T: Quote, Profile, Research, Stock Buzz) rose on growing relief that U.S. bond insurers may have stabilised, with rising property shares helping boost the Nikkei to a six-week high.

But a lack of fresh buying factors and the downward drag of shares such as mobile carrier KDDI Corp (9433.T: Quote, Profile, Research, Stock Buzz), which tumbled after a ratings downgrade, kept gains capped after the Nikkei hit the psychologically important 14,000 level.

U.S. stocks rose more than 1 percent on Monday on signs that things were improving for the nation's two largest bond insurers, with Standard & Poor's saying it was no longer reviewing the credit rating of MBIA Inc (MBI.N: Quote, Profile, Research, Stock Buzz) for a possible downgrade.

MBIA later said it would eliminate its quarterly stock dividend, saving about $174 million a year. [ID:nWNAS2296].

Tokyo market players said the market, caught between hopes that the bond insurer situation was improving and caution over the fact that few details are out yet about concrete solutions, was running out of steam on the issue.

"It seems now as if the downgrade has been avoided, which has relieved the market, but of course that hasn't solved the problem," said Yutaka Miura, a senior technical analyst at Shinko Securities.

"Attention seems to be shifting from the bond insurers to the wider economy and the indicators due out this week, with investors wary of bad numbers."