TOKYO, Sep 27 (Reuters) Japan's Nikkei average rose 1.3 percent on Thursday, led by exporters such as Sony Corp following gains on Wall Street and a softening in the yen, while Hitachi Ltd jumped 7.7 percent on a possible unit sale.
Investors aggressively snatched up recent poor performers such as non-financials, large banks, securities and real estate, seeking to pretty up their portfolios ahead of Sept. 30, the end of the first half of the business year, said Norihiro Fujito, general manager of Mitsubishi UFJ Securities' investment research and information division.
''We have to be careful about moves at the end of September or March after the market experienced a turmoil as window dressing becomes like 'heavy make-up' and the trend could fade as soon as the new quarter starts,'' he said.
''Still, it's not strange investors start liking Japanese stocks that have been lagging behind as the damage from U.S.
subprime problems may been healing with the U.S. market nearing its new highs.'' The benchmark Nikkei gained 213.50 points to 16,649.24 by 0115 GMT. The broader TOPIX index climbed 1.6 percent, or 24.57 points, to 1,600.59.
The yen strengthened slightly to 115.51 yen per dollar from 115.55 yen.
Shares of exporters powered higher with Sony up 1.8 percent to 5,530 yen, while Honda Motor Co Ltd climbed 2.1 percent to 3,860 yen.
Shares of Hitachi shot up 7.7 percent to 755 yen after sources told Reuters it may sell a stake in its struggling hard disk drive unit.
Property firm Mitsubishi Estate Co Ltd jumped 5.8 percent to 3,280 yen, while Sumitomo Mitsui Financial Group gained 4.9 percent to 873,000 yen.
However, electronic parts maker TDK Corp lost 1.1 percent to 10,070 yen after it said on Wednesday it would spend 5 million to buy all shares it does not own in affiliate Densei-Lambda KK to expand into power switches for cars and digital products.
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