Nikkei advances 4 pct; exporters jump, Shinsei down

* Nikkei rallies on upbeat U.S, Japan data

* Exporters boosted by U.S. hopes, weaker yen

* Shinsei, Aozora and Pioneer tumble

* Japan March industrial output rises more than expected

By Shinichi Saoshiro

TOKYO, April 30 (Reuters) - Japan's Nikkei stock average surged 4 percent on Thursday, with exporters like Canon Inc (7751.T) jumping on a rise in U.S. consumer spending and upbeat Japan output data, as well as a weaker yen.

U.S. consumer spending rose although GDP tumbled a steeper-than-expected 6.1 percent in the first quarter. [ID:nN29419669]

Japanese industrial production numbers released on Thursday showed output in March rose 1.6 percent, twice as fast as expected, the first gain in six months. [ID:nT277157]

"Data out of the U.S. is a big factor boosting the market," said Takahiko Murai, general manager of equities at Nozomi Securities.

"In short, first quarter data from the U.S. as well as Japan was not as bad as expected, which is fanning hopes that the economic downturn may have bottomed," he added.

The benchmark Nikkei .N225 surged 339.87 points to 8,833.64, after ending down 2.7 percent on Tuesday. The Tokyo financial markets were closed on Wednesday for a national holiday.

The broader Topix .TOPIX added 3.6 percent to 841.04.

"It appears some investors are selling government bonds and buying back stocks," said Yutaka Miura, a senior technical analyst at Shinko Securities.

"Whether the market can rise further likely hinges on external factors. Continued selling of bonds to buy back stocks, continued weakening of the yen and more U.S. stocks gains will be needed," Miura said.

Ten-year Japanese government bond futures 2JGBv1 fell 0.60 point, coming within striking distance of a six-month low.

The dollar was little changed at 97.57 yen JPY= after falling below 96 yen to a one-month low earlier in the week. [FRX/]

Canon jumped 5.6 percent to 2,935 yen and Sony Corp (6758.T) gained 4.7 percent to 2,570 yen. Toyota Motor Corp (7203.T) advanced 5.2 percent to 3,850 yen.

Honda Motor Co (7267.T) rose 7.1 percent to 2,785 yen after forecasting a small profit for the this year as it cuts costs to counter plunging car sales and a strong yen. [ID:nSP40259]

Shares of medical mask makers continued to soar, receiving a fresh lift after the World Health Organization raised its alert level for swine flu to phase 5, the last step before a pandemic categorisation. [ID:nFLU]

Daiwabo (3107.T) jumped 14.9 percent to 424 yen and Fujibo Holdings (3104.T) gained 35 percent to 162 yen.

Shikibo (3109.T), which makes virus-resistant fibres used in products such as hospital uniforms and sheets, was bid up by its daily limit of 50 yen to 224 yen, a 28.7 percent rise from Tuesday's close.

Among fallers, Shinsei Bank (8303.T) and Aozora Bank (8304.T) tumbled after domestic media reported on Wednesday that their merger talks faced a hurdle as they were unable to gain consent from their top shareholders. [ID:nT145835]

Pioneer Corp (6773.T) also slid after saying it aims to raise 40 billion yen ($412 million) to shore up its financial standing, and is preparing to apply for public funds available to companies hit by the global financial crisis. [ID:nT92843]

Shinsei shed 4.4 percent to 131 yen and Aozora fell 4.6 percent to 126 yen, while Pioneer slid 8.5 percent to 313 yen.

Trade was moderate on the Tokyo exchange's first section, with 1.2 billion shares changing hands, roughly in line with last week's morning average.

Advancing stocks outnumbered declining ones by more than 11 to 1. (Editing by Joseph Radford)