Nikkei rises on views Clinton wins debate, weaker yen underpins

TOKYO, Sept 27 (Reuters) - Japanese stocks rose on Tuesday in choppy trade, recovering from 7-1/2-week lows hit in the morning after sentiment was helped by views that U.S. presidential candidate Hillary Clinton won the debate over her rival Donald Trump.

The dollar bounced back from earlier losses to post gains against the yen, lifting the mood across the board.

The Nikkei share average ended 0.8 percent higher at 16,683.93, recovering from an early morning low of 16,285.41, the weakest since Aug. 5.

The dollar was up 0.4 percent at 100.76 yen in Asian afternoon trade after slipping earlier to 100.085, its lowest since late August.

“A Clinton presidency is the lesser of two evils to the financial market,” said Akio Yoshino, chief economist of equity research at Amundi Japan.

Yoshino said that there will be uncertainty until the Nov. 8 U.S. presidential election and there are still challenges even if Clinton wins such as the ratification of the Trans-Pacific Partnership (TPP) pact.

But a Trump presidency would make investors seriously risk-averse and make them rush to safe-haven assets, Yoshino said.

“It (Trump’s victory) would trigger buying in the yen and the Swiss franc,” he said.

Exporters were mostly higher, with Toyota Motor Corp rising 1.6 percent, Honda Motor Co gaining 1.0 percent and Advantest Corp advancing 1.2 percent.

The broader Topix gained 1.0 percent to 1,349.22, with 31 of all of its 33 subsectors in positive territory.

Financial stocks were weaker, but trimmed the earlier losses towards the market close.

The JPX-Nikkei Index 400 advanced 0.9 percent to 12,088.37.

Editing by Shri Navaratnam and Kim Coghill