Nikkei hits 3-mth closing high on stimulus plan

* Benchmark average hits 3-month closing high

* Car, electronics firms gain on hopes for stimulus benefit

* Eco-friendly promotion plan boosts wide range of shares

* Unexpected rise in machinery orders providing support

By Rika Otsuka

TOKYO, April 9 (Reuters) - Japan's Nikkei average climbed 3.7 percent to a three-month closing high on Thursday, with Sony Corp 6758.T and other electronics firms cheered by an economic stimulus plan that spurred hopes of revived consumer spending.

Automakers and solar power-related firms gained after a draft of the ruling Liberal Democratic Party stimulus plan showed it will feature bigger than expected spending of 15.4 trillion yen ($154.5 billion) and contain measures to encourage the use of solar panels and fuel-efficient cars. [ID:nT285727]

An additional boost came from stronger than expected machinery orders, a volatile figure seen as a leading indicator of corporate spending. [JPMORD=ECI]

Analysts said the market was responding mainly to details of the economic plan, such as subsidies for fuel-efficient cars, rather than the total proposed amount of spending, which is 3.1 percent of GDP.

“Investors welcomed the LDP’s economy-boosting plan. The market also drew support from a slight improvement in people’s views on the Japanese economy,” said Terushi Hirotama, head of trading at Ichiyoshi Securities.

“Activity picked up, though it’s not yet robust as investors are not in a hurry to buy stocks, awaiting report cards from companies.”

Japan’s corporate earnings results season began in earnest on Thursday and will last until late May.

The benchmark Nikkei .N225 gained 321.05 points to 8,916.06, its highest close since early January. The benchmark has staged a sharp rebound from a 26-year closing low of 7,054.98 hit on March 10.

The broader Topix .TOPX climbed 3.3 percent to 841.81.

In still more good news for the Nikkei, foreign investors -- key drivers of the Japanese market -- were net buyers of equities last week to the tune of 44.7 billion yen ($448 million), finance ministry data showed.

The stimulus plan also included a backup scheme in which a government body could potentially buy shares from markets with government guarantees for the programme of 50 trillion yen ($500 billion).

But the market showed only a limited reaction to this proposal due to a lack of details.

Trade was active with 2.6 billion shares changing hands on the Tokyo exchange’s first section compared with last week’s daily average of 2.47 billion.

Advancing shares outpaced declining ones by nearly 6 to 1.


Among the steps in the draft stimulus plan was a move to help promote digital TVs, giving Sony shares an additional boost that helped them climb 7.8 percent to 2,480 yen.

“If there is the kind of proposed subsidy we’re hearing about, this could have quite an impact on consumer buying and is inviting a positive response from investors,” said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.

Other big gainers were Panasonic Corp 6752.T, which rose 4.5 percent to 1,281 yen and Toshiba Corp 6502.T, climbing 8.1 percent to 322 yen. Hitachi Ltd 6501.T rose 6.8 percent to 316 yen.

The stimulus plan also lifted carmakers and solar power-related firms.

Toyota Motor Corp 7203.T, maker of the "Prius" hybrid car, rose 4.3 percent to 3,910 yen, Mitsubishi Motors Corp 7211.T, the only mass-volume carmaker with an electric car prototype on the road, climbed 2.1 percent to 148 yen.

Sharp Corp 6753.T, the world's No.2 maker of solar cells, surged 10.7 percent to 900 yen, while Kyocera Corp 6971.T, the world's No.4 solar cell maker, climbed 4.5 percent to 6,760 yen.

Komatsu Ltd 6301.T, the world's second-largest maker of earth-moving equipment, gained 6 percent to 1,235 yen, while Hitachi Construction 6305.T rose 4.5 percent to 1,336 yen. ($1=99.70 Yen) (Additional reporting by Elaine Lies; Editing by Michael Watson)