Nikkei surges over 14 pct in record 1-day gain

*Nikkei surges over 14 pct on global steps for banks

*Nikkei posts biggest 1-day gain in its 58-year history

*Topix up nearly 14 percent

*Exporters driven up by stronger dollar, banks surge

*Mitsubishi UFJ soars after Morgan Stanley deal (Adds comment, details)

By Aiko Hayashi

TOKYO, Oct 14 (Reuters) - The Nikkei average soared more than 14 percent on Tuesday, the biggest one-day gain in its 58-year history, after governments around the world pledged to support struggling banks and restore confidence in the financial system.

It recouped just over half the losses incurred last week, when the Nikkei lost 24 percent.

Mitsubishi UFJ Financial Group (8306.T) shares surged 14 percent, up by their daily limit after Japan's top bank delivered on a planned $9 billion investment in U.S. firm Morgan Stanley (MS.N). [ID:nLD319859]

Market participants said the jump in Tokyo shares was mainly due to short covering and not due to new inflows of money.

"There's relief that banks probably won't go bankrupt thanks to the capital injection plans," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.

"But after rebounding to some extent, we will inevitably enter a phase of thinking about how the steps will actually impact the global economy."

The benchmark Nikkei .N225 surged 14.2 percent or 1,171.14 points to 9,447.57. The climb surpassed a 13.2 percent jump logged on Oct. 2 1990.

The broader Topix gained 13.7 percent to 956.30.

Earlier in the day, sharp gains triggered a circuit breaker, halting trade in Nikkei futures on the Osaka bourse and Topix futures trading on the Tokyo bourse.

Traders also said that the market surged in part on expectations of a further rise in U.S. stocks. The U.S. Treasury is set to announce a plan to inject $125 billion of capital into the top nine U.S. banks. [ID:nN13487237].