TOKYO, Nov 19 (Reuters) Japanese stocks gained on Monday, buoyed by a weaker yen that took exporters higher and stronger shares in banks such as Mitsubishi UFJ Financial Group Japan's banking regulator is exploring ways to allow banks to invest in nonfinancial firms operated through subsidiaries, according to a report in the Nikkei business daily on Sunday.
A recovery in New York shares gave Tokyo investors the reassurance they needed to start buying, but the Nikkei's gains were expected to be capped near 15,300 by selling due to lingering concern about the long-term direction of Wall Street and the U.S. economy.
The dollar was hovering just below 111 yen in Tokyo morning trade after an earlier slip to around 110.80 yen, and market participants said the Nikkei was likely to take its cue from the yen's movements.
''The yen has lost a little ground and with Wall Street appearing to settle down a bit -- though we don't know if this will last -- this is giving the Tokyo market a boost,'' said Seiichi Miura, a strategist at Mitsubishi UFJ Securities.
''With the bulk of results now out in Tokyo, people are looking to buy places that did well. Banks are seeing some short-covering since they were sold fairly actively recently.'' At 0059 GMT the benchmark Nikkei was up 0.8 percent at 15,269.09, a rise of 114.48 points. It had earlier risen as high as 15,289.13.
The broader TOPIX was up 0.8 percent at 1,482.82, a gain of 11.15 points.
Bank shares forged higher, with Mitsubishi UFJ Financial Group up 3.1 percent at 963 yen and Sumitomo Mitsui Financial Group up 2.5 percent at 806,000 yen.
The Nikkei report on banking proposals said Japan's financial regulator, the Financial Services Agency, was also considering loosening rules that would fully allow banks to trade commodities and commodity futures, with an eye on raising global competitiveness among Japanese banks through deregulation.
Resona Holdings Inc gained 1.5 percent to 202,000 yen after the bank raised its net profit forecast for the year to March by 9.5 percent to 230 billion yen, although that still falls short of the market consensus of 249.6 billion yen and would mark a year-on-year decline of 65 percent.
Exporters climbed as the yen crept lower, with Hitachi up 3.6 percent at 759 yen and Sharp Corp up by 3 percent at 1,794 yen.
Honda Motor Co Ltd also rose, climbing by 2.4 percent to 3,870 yen.
REUTERS DKS BST0704