Nikkei jumps more than 3 pct as credit fears ease

By Taiga Uranaka

TOKYO (Reuters) - Japan's Nikkei average surged more than 3 percent on Wednesday, topping the 13,000 level for the first time in three weeks as credit fears eased following a capital boost by Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz).

The dollar's overnight surge against the yen also propelled exporters higher, with Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) jumping nearly 7 percent.

"Concerns about the financial system have eased, and Japanese stocks have been oversold compared with those in the U.S. and Europe," said Naoteru Teraoka, general manager of investment management at Chuo Mitsui Asset Management. "It's a swing back from extreme anxiety."

The benchmark Nikkei .N225 ended the morning session up 3.3 percent at 13,079.11. The broader TOPIX gained 3.3 percent to 1,271.23.

U.S. stocks and the dollar jumped after strong demand for a Lehman Brothers share offering eased fears it was headed towards a fate similar to Bear Stearns BSC.N and raised optimism that the worst of the credit crisis may be over.

A $19 billion write-down by UBS also reinforced the view that banks were aggressively wiping their books clean of soured investments tied to the slumping U.S. housing market.

Financial shares rose sharply, with Japan's second-largest bank Mizuho Financial Group (8411.T: Quote, Profile, Research, Stock Buzz) jumping 8.7 percent to 399,000 yen. Japan's largest brokerage Nomura Holdings Inc (8604.T: Quote, Profile, Research, Stock Buzz) soared 8.3 percent to 1,614 yen.

Still, the gains were seen limited as few saw a real end yet to the global credit market turmoil.