* Exporters lead gainers as yen nears 100-mark to dollar * Mitsui Eng jumps 13.6 pct on report of merger talks Kawasaki Heavy * SG: most traded Nikkei stock options is a May call at 14,500 By Dominic Lau TOKYO, April 22 (Reuters) - The Nikkei average climbed 1.9 percent to its highest close in almost five years on Monday, as the yen weakened after the Group of 20 leading economies stopped short of criticising Japan's expansionary monetary policies. Major exporters charged higher as the dollar firmed against the yen to within a whisker of 100 after the G20 simply said in a communique after a two-day meeting it would be "mindful" of possible side effects from extended periods of monetary stimulus. "I had been worried that the G20 countries would criticise Japan's easing of monetary policies," said Ryota Sakagami, chief strategist at SMBC Nikko Securities. "The market uptrend will continue ... I think sooner or later the Nikkei will reach 14,000. For the moment, the one concern is still the weak global economy, especially the weak U.S. macro economic indicators." The Nikkei ended up 251.89 points at 13,568.37, its highest closing level since July 2008. Sakagami said domestic-focused companies were likely to outperform exporters in the next few months, although the yen's weakness lifted the appeal of export-driven firms on Monday. Honda Motor Co, Mazda Motor Corp, Canon Inc and Olympus Corp were up between 1.7 and 5.9 percent. Electronic component maker TDK Corp rose 2.9 percent. According to data provider Markit, the stock was the most shorted Asian firm with 14.7 percent of its shares out on loan. BANKING ON REFLATION The Bank of Japan on April 4 stunned financial markets by announcing a sweeping monetary expansion programme aimed at ending two decades of stagnation, promising to inject $1.4 trillion into the world's third-largest economy in less than two years. Financials, which are expected to benefit from the reflationary drive, were also in demand on Monday, with Nomura Holdings, Japan's top brokerage, up 2.4 percent and Mizuho Financial Group adding 1.9 percent. But real estate companies, which have also benefited from reflationary hopes, slipped 0.2 percent. The real estate sector has surged 110 percent since mid-November when Japan's current prime minister began promising bold monetary and fiscal policies during his election campaign, outpacing a 56.7 percent rise in the Nikkei during the same period. The broader Topix index advanced 1.7 percent to 1,145.60, with volume hitting a one-week high as 4.42 billion shares changed hands. Other notable gainers included Mitsui Engineering & Shipbuilding Co Ltd, jumping 13 percent after the Nikkei newspaper said the shipbuilder and heavy electric machinery maker and Kawasaki Heavy Industries Ltd were set to begin merger talks. Shares of Kawasaki Heavy eased 0.9 percent. 14,000 AND BEYOND "What the market is looking now is for the earnings results and earnings guidance from companies. My view is that the market will refocus ... that weak yen does help a lot," said Hidehiro Tomioka, head of equity investment at Manulife Asset Management. "Companies will likely base their budget on 90 yen to the dollar. The market will easily calculate the 10 yen difference and will realise that the earnings growth is very big for the fiscal year ending next March. That will be the driver." Tomioka said he was expecting the Nikkei to reach 16,000 to 17,000 by the end of 2013, 18 to 25 percent above where the index ended on Monday. Societe Generale said the most traded Nikkei index stock option on Monday was a call with a strike price of 14,500 and with a May expiry. The next-most traded was a put at 12,500, followed by another call at 15,000 and another put at 12,750. They all had a May expiry. In terms of valuations, Japanese equities carry a 12-month forward price-to-earnings ratio of 14.7, a level not seen since June 2010 but still below its 10-year average of 16.4, according to Thomson Reuters Datastream.