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Nikkei at 6-mth high on U.S. bank hope, Orix jumps

 TOKYO, May 7 (Reuters) - Japan's Nikkei average jumped 4
percent on Thursday to a six-month high, boosted by financial
shares such as Mitsubishi UFJ Financial Group 8306.T on
investor relief over growing clarity about the health of the U.S.
financial system.
 About half of the 19 largest U.S. banks are expected to need
more capital once the results of government "stress tests" of
their ability to weather a deep recession are released on
Thursday at 5 p.m. EDT (2100 GMT). [ID:nL6943131]
 While capital shortfalls reported so far are much larger than
analysts expected, U.S. bank shares soared as investors got more
insight about how the industry will cope with perhaps the most
severe recession since World War Two.
 "It's become highly unlikely there will be more failures like
Lehman Brothers. Investors seem to have decided that capital
injections wouldn't be so bad if they could help solve the
problems," said Fumiyuki Nakanishi, manager at SMBC Friend
Securities.
 "The market now holds the view that the worst may be over, at
least for America. A very strong bull market appears to have
begun."
 Among other notable stocks, Orix Corp 8591.T shot up more
than 8 percent after a newspaper said it is seeking an additional
100 billion yen ($1 billion) or so in emergency government loans
to supplement its fundraising efforts.
 Orix, Japan's biggest leasing firm, said it has not
approached the Development Bank of Japan (DBJ) for an additional
loan and has no funding problems. [ID:nTFD003284] [ID:nBNG366446]
 The benchmark Nikkei .N225 climbed 4.1 percent or 370.86
points to 9,348.23. It earlier rose as high as 9,366.79, its
highest point since early November.
 The broader Topix .TOPX climbed 4.1 percent to 881.52.
 On Wednesday the Dow Jones industrial average .DJI rose 1.2
percent.
 Adding to an upbeat note, the number of U.S. private-sector
job losses in April touched the lowest level since November,
according to a report by ADP Employer Services, the latest data
suggesting the worst of the recession may have passed.
 BANKS SURGE
 Japan's banking subindex .IBNKS.T powered 7.9 percent
higher.
 Mitsubishi UFJ Financial Group 8306.T soared 10.7 percent
to 590 yen, even after Japan's biggest bank warned on Friday that
it now expects to have slid to its first annual net loss since it
was formed in 2005, hit by losses on its stockholdings.
[ID:nT8737]
 Sumitomo Mitsui Financial Group 8316.T jumped 10 percent to
3,840 yen.
 The third-ranked bank said it will buy Citigroup's C.N
Japanese broker and key investment banking units for $5.9 billion
and look to form a financial services powerhouse through an
alliance with Daiwa Securities Group 8601.T. [ID:nBNG446757]
 Mizuho Financial Group 8411.T advanced 10.1 percent to 228
yen, while Nomura Holdings Inc 8604.T, Japan's biggest
brokerage, gained 7.3 percent to 646 yen.
 Shares of Orix jumped 8.5 percent to 5,000 yen.
 Exporters gained, receiving additional help from a weaker
yen, which boosts their profits when repatriated. In early trade
the dollar rose 0.4 percent to 98.74 yen JPY= from late U.S.
trade on Wednesday. [FRX/]
 Toyota Motor Corp 7203.T rose 3.6 percent to 4,040 yen and
Canon Inc 7751.T jumped 7.4 percent to 3,360 yen.
 Among stocks that fell, Tokyo Electron Ltd 8035.T shed 2.1
percent to 4,580 yen after the Nikkei business daily said the
chipmaking equipment maker is expected to incur a group operating
loss of about 65 billion yen ($662 million) for 2009/10, a sharp
reversal from the 14.7 billion yen profit estimated for 2008/09.
[ID:nBNG485778]
 (Reporting by Aiko Hayashi; Editing by Michael Watson)









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