Japan stocks edge up, banks and autos strong

TOKYO, Nov 26 (Reuters) Japan's benchmark Nikkei rose on Monday, erasing some of the 1.3 percent overall losses of the previous week on buying of carmakers and bank stocks such as Mitsubishi UFJ Financial Group.

One exception was Sanyo Electric Co Ltd, which shed 2.3 percent to 173 yen after a newspaper reported the company will book a much larger loss for the 2000/01 business year.

A recovery in New York shares on Friday, mainly due to retailers and financial shares, and a slight weakening of the yen against the dollar were also giving Japanese shares a boost.

But the topside was expected to remain heavy on lingering concern about the longer-term U.S. economic picture despite fairly good results on ''Black Friday,'' the start of the U.S.

holiday shopping season.

''The recovery, which was sparked by the recovery in New York, is mainly a response to the selling we saw last week, and not due to any larger factors,'' said Yutaka Miura, senior technical analyst at Shinko Securities.

''I don't believe we're at the start of a sustained, long-term recovery, but we could well aim for 15,200-15,300 over the shorter term.'' The dollar, which last week touched the 107 yen level, was hovering in the mid-108 yen level in Tokyo trade, giving exporters a boost, with automakers gaining substantially.

On Wall Street, discount chain Target led retailers higher as droves of shoppers turned out for Black Friday, the official beginning of the holiday shopping season.

Shares of JPMorgan Chase, Bank of America and Citigroup all rose more than 2 percent. The three banks, spearheading an effort to establish a superfund to ease problems in the credit market, are expected to seek support from others in the industry, the Wall Street Journal reported.

At 0043 GMT, the benchmark Nikkei was up 0.6 percent at 14,976.65, a gain of 87.88 points. On Thursday, its last trading session, it touched a 16-month low of 14,669.85.

The broader TOPIX was up 0.94 percent at 1,450.82.

CARS, BANKS Shares in automakers surged, led by Nissan Motor Co, which was up by 5 percent at 1,166 yen. Honda Motor Co was close on its heels with a rise of 2.8 percent at 3,660 yen.

Other exporters also forged upwards, with Sony Corp rising by 2.7 percent at 5.410 yen and Canon Inc climbing 1.6 percent to 5,530 yen.

Banks climbed as well, although Tokyo market participants said this was more due to simple short-covering based on a sense that they'd been oversold than any direct link with movements on Wall Street.

''Certainly Wall Street bank gains improved the mood, but that's about it,'' Miura said.

Mitsubishi UFJ was up by 3.6 percent at 960 yen and Sumitomo Mitsui Financial Group up 3.3 percent at 840,000 yen. Mizuho Financial Group was up 2.5 percent at 537,000 yen.

Shares of Astellas Pharma Inc rose 3.2 percent to 4,880 yen after the company said it would buy back up to 40 billion yen (9 million) worth or up to 8 million of its own shares between Dec. 3 and Jan. 18.

Reuters AK VP0640