Nikkei rises 2.2 percent on bank optimism

By Aiko Hayashi

TOKYO (Reuters) - Japan's Nikkei average gained 2.2 percent on Tuesday, buoyed by exporters such as Sony Corp (6758.T) after bullish analyst comments boosted confidence about the U.S. financial sector.

Komatsu Ltd (6301.T) jumped more than 6 percent after the Nikkei business daily said the company returned to profitability in the April-June quarter, helped by cost cuts and recovering demand in China and other emerging economies.

A halt in the yen's sharp appreciation against the dollar also helped the Nikkei rise from an eight-week closing low booked on Monday.

In comments to CNBC television, well-known analyst Meredith Whitney said U.S. bank shares were in for at least a short-term gain of 15 percent.

"After a recent bearish run, the market has been looking an opportunity to rebound, and the analyst comments on the financial sector fit the bill," said Yutaka Miura, senior technical analyst at Mizuho Securities.

Whitney said major financials, including Bank of America Corp (BAC.N) and JPMorgan Chase & Co (JPM.N), which along with Goldman Sachs (GS.N) are scheduled to report results this week, could do well in the second quarter.

Whitney, who has in the past been bearish, also upgraded Goldman to "buy," driving its stock higher.

"But we won't know anything for sure until we see their actual numbers. I expect today's gains to be somewhat limited," said Miura.

In moderate trade, the benchmark Nikkei .N225 advanced 201.05 points to 9,251.38. It slid 2.6 percent the previous day to hit its lowest finish since May 18 and for its ninth day of falls. It lost 9.1 percent over that nine-day period.

The broader Topix rose 1.9 percent to 868.54.

In early Asia trade, the dollar was trading around 93 yen after hitting a five-month trough of 91.73 yen. Investors welcome a weaker yen as it boosts exporters' profits when they are repatriated.

On Monday, the Standard & Poor's 500 Index .SPX gained 2.5 percent.

NISSAN, AUTOMAKERS STRONG

Automakers rose after the Nikkei business daily said major Japanese carmakers such as Nissan Motor Co (7201.T) and Honda Motor (7267.T) are raising production capacity in China as brisk local demand helps prop up their earnings at a time when sales virtually everywhere else are in a steep slump.

Nissan surged 7.7 percent to 547 yen after the Nikkei reported that the automaker will boost production capacity in China by 20 percent. Honda rose 1.5 percent to 2,405 yen and Toyota Motor Corp (7203.T) added 3 percent to 3,480 yen.