Japan stocks bounce back, led by banks

(Updates to midsession)

TOKYO, Dec 20 (Reuters) - Japanese stocks bounced back on Thursday after a six-day losing streak, with bank shares including Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz) up on reports that they will refuse to contribute to a U.S.-led subprime rescue fund.

Still, with high volatility in thin trade and a lack of powerful market-moving factors, some participants said the upside was limited and the market could go in either direction.

The benchmark Nikkei average .N225 ended the morning session up 0.7 percent at 15,139.01 and the broader TOPIX index gained 0.7 percent to 1,466.89. (Reporting by Taiga Uranaka)