* Nikkei hits 1-week high after BOJ stands pat on policy * Banking shares outperform after BOJ said to extend loan facilities By Ayai Tomisawa TOKYO, Feb 18 (Reuters) - Japan's Nikkei share average soared to a one-week high on Tuesday afternoon, spurred by banks after the Bank Of Japan said it would extend loan facilities by a year at its policy meeting. As widely expected, the BOJ kept monetary policy steady and maintained its upbeat assessment on the economy. It also decided to extend three special loan facilities by a year from their scheduled expiry at the end of March. The Nikkei jumped 3.2 percent to 14,858.87 in early afternoon trade, the highest since Feb. 12. The benchmark closed its morning session at 14,526.04. The banking sector was the top gainer, with Mitsubishi UFJ Financial Group jumping 4.4 percent, Sumitomo Mitsui Financial Group up 3.9 percent and Mizuho Financial Group rising 2.8 percent. "There was no surprise from the meeting about policy change, but the announcement about extension of loan facilities is positive," said a fund manager at a Japanese asset management firm. "Short-term buyers are picking up banking shares." The central bank will also double the size of funds available to financial institutions through the various loan facilities in the hope they would boost lending instead of sitting on the pile of cash. The Topix gained 2.5 percent to 1,221.81. The JPX-Nikkei Index 400, an index launched this year comprised of firms with high return on equity and strong corporate governance, gained 2.5 percent to 11,041.49.