Nikkei up 2.3 pct as exporters climb after U.S. earnings

(Adds comment, stocks, details)

By Aiko Hayashi

TOKYO, April 17 (Reuters) - Japan's Nikkei stock average rose 2.3 percent on Thursday as exporters such as Canon Inc (7751.T) climbed after solid earnings from IBM (IBM.N) and other U.S. companies reassured investors about corporate profitability amid a weak economy.

Top lender Mitsubishi UFJ Financial Group (8306.T) and other banks climbed after results from JPMorgan Chase & Co (JPM.N) and Wells Fargo & Co (WFC.N) heartened investors who had counted on the big banks to fare better than rivals in coping with the turmoil in the housing and credit markets. [ID:nN16378871]

"Some shares rose in tandem with earnings from their U.S. peers such as high-tech exporters, which got a boost from IBM's results," said Soichiro Monji, chief strategist of the equity management department at Daiwa SB Investments.

"Investors also feel encouraged to return to shares that had been oversold, such as banks and property firms, as U.S. earnings as a whole have been solid and their outlooks have been more bullish than expected."

The benchmark Nikkei average .N225 added 306.10 points to end the morning session at 13,452.23, poised to finish the day at its highest close since Feb. 29.

The broader TOPIX index climbed 2.2 percent or 27.97 points to 1,299.85.

International Business Machines Corp posted stronger-than-expected quarterly results on Wednesday and raised its 2008 outlook, boosting its shares 2.7 percent and sending an encouraging signal about technology earnings in the face of a weak U.S. economy. [ID:nN16208134]

One stock that bucked the market trend was Aeon Co Ltd (8267.T), which fell 3.5 percent to 1,260 yen. Shares in its U.S. apparel unit Talbots Inc (TLB.N) plunged as much as 33 percent on Wednesday following Talbots' disclosure that two major banks would no longer make letters of credit available to the company. [ID:nN16410791]

EXPORTERS UP

Japan's technology shares rose, with investors encouraged by relatively upbeat corporate earnings in the key U.S. market.

Canon shot up 5.9 percent to 4,990 yen and Sony Corp (6758.T) gained 3.6 percent to 4,340 yen.

Advantest Corp (6857.T), the world's largest maker of microchip testers, climbed 5.3 percent to 2,990 yen and electronics parts maker Kyocera Corp (6971.T) jumped 5.1 percent to 8,810 yen.

Mitsubishi UFJ rose 3 percent to 1,007 yen and No.2 Mizuho Financial Group (8411.T) added 5.9 percent to 470,000 yen. Sumitomo Mitsui Financial Group (8316.T), the third-biggest bank, gained 5.2 percent to 774,000 yen.

"Earnings at U.S. companies have generally been better than expected, though worries about Citigroup's earnings remain," said Yoku Ihara, manager of the investment information department at Retela Crea Securities.

Analysts on average expect Citigroup Inc (C.N), the largest U.S. bank, to post a quarterly loss close to $5 billion on Friday.

Toyota Motor Corp (7203.T) rose 2.9 percent to 5,020 yen despite the Nikkei business daily saying that Japan's largest automaker would likely post a 20 percent fall in operating profit for the business year to March 2009 on slower U.S. sales and a stronger yen. [ID:nT192807]

Market analysts said investors have largely factored in the expected fall in profit at the automaker.

Trade was moderate on the Tokyo exchange's first section, with 880 million shares changing hands, compared with last week's morning average of 840 million.

Advancing stocks outnumbered declining ones by 6 to 1. (Editing by Brent Kininmont)