Nikkei up 2.2 pct at 4-week high, autos lead gains

By Aiko Hayashi

TOKYO (Reuters) - Japan's Nikkei average rose 2.2 percent on Thursday to a four-week closing high, as Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) and other carmakers led gains by exporters on a softer yen versus the dollar and a drop in oil prices.

Toray Industries (3402.T: Quote, Profile, Research, Stock Buzz) and Mitsubishi Rayon (3404.T: Quote, Profile, Research, Stock Buzz) surged on plans to work with other firms to develop a new carbon fiber material for cars which would lighten vehicles for better fuel efficiency.

Sentiment improved as a weaker yen and a slide in oil prices to a six-week low overnight eased some concerns about corporate earnings, and on hopes for a rescue plan for mortgage U.S. finance companies Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz).

But further gains may be limited ahead of Japanese corporate earnings which kick off next week.

"There are fewer reasons to sell, but investors still can't buy aggressively as concerns about U.S. financials haven't been completely wiped away and investors want to see how first quarter earnings turn out," said Naoki Koga, senior fund manager at Toyota Asset Management.

"Japanese corporate earnings probably won't be horrible because of a weakening yen, but they won't be good, either," he said.

The benchmark Nikkei average .N225 added 290.38 points to end at 13,603.31, above its 25-day moving average and its highest finish since June 26.

The broader Topix climbed 2.2 percent to 1,332.57.