Nikkei gains as techs, banks, trading houses rise

By Elaine Lies

TOKYO (Reuters) - Japan's Nikkei average rose 1.3 percent on Tuesday, buoyed by Wall Street's gains as interest in risk-taking rose, with Mitsubishi Corp (8058.T) and other trading firms up reflecting climbs in oil, gold and other commodities prices.

Tokyo Electron (8035.T) and other chip-related shares climbed following gains by their U.S. peers, after the Dow rose to a 13-month high and other Wall Street indexes gained after the Group of 20 pledged to keep aid flowing to the world economy, encouraging investor appetite for risk.

But analysts said long-term uncertainty was likely to keep a lid on gains in Japan.

"Things are definitely getting brighter for the short term, but over the longer term there's quite a lot of uncertainty that's preventing rises in Japanese stocks," said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.

"Will there be more government bond issuance? Will the yen continue to rise? And what sort of policies can we expect from the government?"

The benchmark Nikkei .N225 gained 128.68 points to 9,937.67 by midafternoon. The broader Topix , which is not as heavily tech-centered, rose 0.8 percent to 878.00.

Analysts said the Nikkei faces resistance around 10,000, just about where the 25-day moving average comes in, but if it gains upward momentum it could quickly punch through that level.

The next key technical level is 10,200, which is where the Nikkei's 75-day moving average comes in, said Kenichi Hirano at Tachibana Securities.

As shown by the Wall Street gains, risk appetite was fed by the G20's weekend pledge to keep emergency measures in place until recovery was assured, raising expectations for prolonged low interest rates.

RISK-TAKING, BUT NOT JAPAN

"The market became more confident that the current ultra low interest rate policy will continue after the G20 meeting, giving investors more chance to take risks," said Shoji Yoshigoe, deputy general manager and senior investment strategist at Mitsubishi UFJ Securities.

But appetite to invest in Japanese stocks could be limited, while investors may increase their weighting in Hong Kong or Indian shares, he added.

Chip-related shares climbed after gains in their U.S. peers sent the PHLX semiconductor index .SOXX up 3.2 percent.

Chip tester maker Advantest (6857.T) rose 3 percent to 2,040 yen and Tokyo Electron (8035.T) climbed 2.9 percent to 5,000 yen. Nikon (7731.T), which makes steppers, machines used to produce semiconductor chips, rose 1.7 percent to 1,701 yen.

Trading houses advanced after gains in a broad range of commodities on Monday that saw oil rise more than 2 percent on supply disruption and gold hit a record high of $1,110.85 an ounce. Other metals also gained.