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Tokyo, Sep 27: The Nikkei average jumped 2.51 percent on Wednesday, its biggest one-day gain in two months, as exporters such as Shin-Etsu Chemical Co. Ltd. and Canon Inc. gained on fading concerns over the U.S. economy, a key market for Japanese products.

Stronger-than-expected U.S. consumer confidence data eased concerns of a slowdown in the world's No.1 economy, while bank shares bounced back, helped by the view their prices had fallen too far recently. The banking sector IBNKS.rose 4 percent.

''Such stocks as Shin-Etsu and Canon bounced back and hit new highs. I can see buying from long-term investors behind their gains,'' said Masahiko Sato, executive director at Nomura Securities' product marketing deparment.

The Nikkei finished 390.42 points higher at 15,947.87, its highest close since Sept. 7. It had fallen in the previous three session to hit a seven-week closing low on Tuesday.

The boarder TOPIX index gained 2.69 percent to 1,591.04, its highest close since Sept. 19.

Sato said, however, the sudden market jump was somewhat as expected because several technical indicators suggested the Tokyo market had gone too far in a negative direction and was ready for a turn-around.

''Although the Nikkei rose more than 350 points, I couldn't feel real energy in the market,'' Sato said.

Sato and other market analysts said Wednesday's limited trading volume suggested market gains were led partly by quick unwinding of positions by those who had sold large-cap shares and index futures earlier.

Exporters, Bank rally

Shares of exporters rose after a surprisingly strong reading in U.S. consumer confidence on Tuesday, which also helped push the dollar up against the yen. A weaker yen inflates profits Japanese companies earn abroad when repatriated home.

Investors had been worried about the possibility of a hard landing for the United States economy after a Philadelphia Federal Reserve Bank report last week showed a surprisingly weak reading in the mid-Atlantic region's factory activity.

''Now chances look high of a soft landing for the U.S.,'' said Tsuyoshi Nomaguchi, a strategist at Daiwa Securities.

''Consumer confidence data showed individual spending -- the main engine of the economy there -- stands tall thanks to a fall in energy costs, reversing earlier pessimism,'' he said.

Shin-Etsu, which makes almost 70 percent of its sales abroad, hit a lifetime high of 7,570 yen before ending the day up 4.3 percent at 7,560 yen.

Shares of the world's biggest silicon wafer maker reclaimed a level marked soon after the company's announcement of a $1 billion investment plan last week.

Printer and camera maker Canon, which makes over 75 percent of its sales outside Japan, rose 3.2 percent to 6,090 yen. It hit a record high of 6,100 on a share-split adjusted basis.

Toyota Motor Corp., the world's No.2 auto maker, which raised its half-year profit goal last week, gained 2.1 percent to 6,370 yen.

Shares of Sumitomo Mitsui Financial Group Inc. jumped 4.4 percent to 1.2 million yen after a source close to the matter said Japan's third-largest lender is considering repaying the nearly $6 billion it owes the government by the end of the year, three months ahead of schedule.

In contrast, Sharp Corp. fell 1.2 percent to 2,020 yen on concerns about dilution of share value after the consumer electronics maker announced a plan to issue convertible bonds.

Trade rose from the previous session, with 1.54 billion shares changing hands on the Tokyo exchange's first section.

That was still well below last year's daily average of 1.90 billion shares. Advancing shares outnumbered decliners by a ratio of 16 to one.

Reuters