Nikkei up 2.1 pct as Fast Retailing gains on outlook

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By Aiko Hayashi

TOKYO, April 11 (Reuters) - Japan's Nikkei average rose 2.1 percent on Friday, boosted by shares of retailers such as Fast Retailing Co (9983.T) on solid earnings expectations, while Astellas Pharma Inc (4503.T) climbed after U.S. authorities approved its heart-imaging agent.

High-tech shares such as Advantest Corp (6857.T) advanced after their U.S. peers lifted Wall Street on a brokerage upgrade of chip makers.

But Takeda Pharmaceutical Co Ltd (4502.T) fell 2.8 percent to 5,260 yen, becoming the biggest drag on the Nikkei 225, after its $8.8 billion acquisition of U.S. biotech company Millennium Pharmaceuticals Inc MLNM.O in the biggest overseas buyout by a Japanese drug maker. [ID:nT182184]

"Blanket pessimism about Japanese corporate earnings is likely receding," said Masaru Hamasaki, a senior strategist at Toyota Asset Management.

"Investors had been extremely worried about U.S. corporate earnings and the impact of a stronger yen on exporters, but they might have started thinking retailers and other domestic-demand reliant shares could benefit from a stronger yen."

The benchmark Nikkei .N225 gained 272.98 points to end the morning session at 13,218.28, on course to end a three-day losing streak. The average fell 1.3 percent on Thursday to log its lowest close in more than a week.

The broader TOPIX index added 1.5 percent or 18.99 points to 1,267.06.

Still, equities trading manager Yusuke Sakai at Mizuho Securities said investors will likely hold back ahead of the Japanese corporate earnings season.

"Investors are becoming cautious as Japanese companies will start announcing next week how they see their earnings prospects for this year," he said.

After the morning close, Mizuho Financial Group Inc (8411.T) said it expected 400 billion yen ($3.9 billion) of subprime-related trading losses at its unlisted brokerage, Mizuho Securities, for the year that ended in March. [ID:nTKF003075]

Mizuho was up 0.8 percent at 390,000 yen.

FAST RETAILING SHINES

Shares of Fast Retailing climbed 3.5 percent to 9,940 yen after the retailer raised its full-year operating profit forecast by 10 percent to 80.1 billion yen on the back of a recovery at its Uniqlo casual-clothing chain.

Seven & I Holdings Co Ltd (3382.T) shot up 6.4 percent after Japan's largest retailer said it would buy back and cancel up to 170 billion yen of its shares and Mitsubishi UFJ Securities lifted its rating on the stock to "1" from "2" saying the shares are cheap considering an expected improvement on return on assets.

Seven & I posted its first drop in full-year operating profit in six years, hit by weak consumer spending and tough competition, but it forecast a recovery this year as it closes unprofitable outlets. [ID:nT170336]

Astellas added 2.9 percent to 4,200 yen after it and Therapeutics CVTX.O said the U.S. Food and Drug Administration had approved their heart-imaging agent regadenoson, also called Lexiscan. [ID:nT167567]

Technology shares gained, with Advantest, the world's largest maker of microchip testers, up 6.2 percent at 2,820 yen.

On Thursday, Intel Corp (INTC.O) shares jumped and helped lift all three major U.S. stock indexes after Banc of America Securities upgraded the U.S. semiconductor sector, saying a modest inventory buildup has eased.

Trade picked up on the Tokyo exchange's first section, with 1 billion shares changing hands, compared with last week's morning average of 824 million, partly boosted by trades in connection with the settlement of Nikkei options contracts.

Advancing stocks outnumbered decliners by nearly 5 to 1. (Reporting by Aiko Hayashi; Editing by Hugh Lawson)