Nikkei at 4-month closing high, led by exporters

(Adds details, trade volume)

TOKYO, May 2 (Reuters) - Japan's Nikkei stock average rose more than 2 percent on Friday to its highest close in nearly four months, buoyed by exporters such as Advantest Corp 6857.T on a softer yen and a rally on Wall Street amid growing optimism about the U.S. economy.

The benchmark Nikkei has now gained 20 percent since hitting a low for the year on March 17, handily outperforming a roughly 12 percent rise in the U.S. Standard & Poor's 500 Index .SPX and the pan-European FTSEEurofirst 300 index .FTEU3 during the same period.

Property firm Sumitomo Realty & Development Co 8830.T shot up more than 7 percent after a newspaper reported its profits were likely to beat forecasts. Other real estate stocks also rose on the back of strong earnings, helped by demand for office space in Tokyo.

Bank shares tracked gains in their U.S. peers due to improved investor confidence a day after the Federal Reserve trimmed rates again and hinted at a pause in its recent campaign to lower borrowing costs.

On the negative side, Japan Tobacco Inc 2914.T slid 4.1 percent to 490,000 yen after the world's third-largest cigarette maker forecast a 28 percent fall in profit this year due to an accounting change, its first drop in eight years. This prompted Goldman Sachs to remove the stock from its "conviction buy list" and lowered the target price. [ID:nT2944]

“Today’s market is buoyed by a rally in the United States and a softer yen. But investors seem to have become too optimistic about the U.S. economy recently as jobs data later today is still expected to be poor,” said Soichiro Monji, a chief strategist of the equity management department at Daiwa SB Investments.

“The Nikkei’s 14,000 looks to be the ceiling for now. If it goes above that level, stocks are overbought under the current conditions.”

The Nikkei average .N225 climbed 2.1 percent or 282.40 points to end at 14,049.26, its highest close since Jan. 11.

It rose 1.3 percent during the week, posting the seventh weekly gain this year. In April, the benchmark gained 10.6 percent, the biggest monthly percentage gain since July 1995, when it jumped 14.9 percent.

The broader TOPIX index .TOPX added 2.3 percent or 31.29 points to 1,377.39.

Yusuke Sakai, manager of equities trading at Mizuho Securities, said the support line for the Nikkei looks to have risen to around 14,000 from the range between 13,500 and 14,000.

“The market has begun to see the 13,000 level as fairly cheap now,” he said.

The three U.S. major indexes closed at the highest level on Thursday since the first half of January as equities extended a rally started in mid-March on optimism that credit markets and the economy have begun to stabilise.

Traders will scrutinise the U.S. labour Department's April employment report due at 1230 GMT for more clues on how the U.S. economy is faring. Economists expect nonfarm payrolls USNFAR=ECI to have shed 80,000 jobs, in line with losses in the three previous months.

After a one-day break on Tuesday, Japanese markets will be shut again next Monday and Tuesday for national holidays.


The dollar climbed 0.2 percent from U.S. trade to 104.62 yen JPY=, pushing back near a two-month high of 104.89 yen hit earlier in the week on trading platform EBS.

Japan's high-tech shares gained after the tech-heavy Nasdaq Composite Index .IXIC ended the day up 2.8 percent, helped by a jump in chip maker Intel Corp INTC.O, a technology bellwether.

Shares of Advantest, the world's largest maker of microchip testers, rose 4.5 percent to 2,910 yen and TDK Corp 6762.T, an electronic components maker, climbed 3.8 percent to 7,070 yen.

Honda Motor Co Ltd 7267.T advanced 3.9 percent to 3,430 yen.

Investors had fretted over a recent rise in the yen as it makes Japanese products less competitive abroad and hurts the value of overseas sales when translated back into the Japanese currency.

Property shares gained, with Sumitomo Realty one of the top boosters of the Nikkei 225. The Nikkei business daily reported the country’s third-ranked property developer has likely beaten its 2007/08 profit forecast, helped by brisk office leasing business.

Rival property firms Mitsui Fudosan 8801.T and Mitsubishi Estate 8802.T also posted rises in quarterly profit on tight supply of prime office space in Tokyo this week.

Sumitomo Realty climbed 7.4 percent to 2,690 yen, Mitsui Fudosan jumped 5 percent to 2,715 yen and Mitsubishi Estate advanced 4.5 percent to 2,995 yen.

Shares of top lender Mitsubishi UFJ Financial Group 8306.T rose 2.7 percent to 1,131 yen, while No.2 bank Mizuho Financial Group 8411.T climbed 5.1 percent to 539,000 yen and Sumitomo Mitsui Financial Group 8316.T, the third-biggest bank, gained 4.6 percent to 911,000 yen.

Trade was moderate on the Tokyo exchange’s first section, with 1.7 billion shares changing hands, in line with last week’s daily average.

Advancing stocks outnumbered decliners by roughly 7 to 1. (Reporting by Aiko Hayashi; editing by S. Hardach)