Nikkei up 1.5 pct as weak yen lifts tech stocks

TOKYO, Jan 12 (Reuters) The Nikkei share average rose 1.5 percent on Friday, snapping a two-day losing streak as technology firms such as Kyocera Corp. gained after the yen hit its lowest point in more than a year against the dollar.

Bank shares rose on expectations that the Bank of Japan may raise interest rates next week, benefitting banks' lending businesses.

But Fast Retailing Co. Ltd. tumbled after the clothing retailer cut its full-year profit forecast, prompting a brokerage downgrade.

''The yen's level is quite low and investors are relieved for now that the SQ is over,'' said Masayoshi Okamoto, head of dealing at Jujiya Securities, referring to the special quotation for options contracts that are settled today.

Still, Okamoto said the market may be volatile given recent sharp drops in crude oil and other commodity prices.

''In addition to Japanese economic fundamentals, we have to think how Japanese stocks will be affected by money flows in the global market,'' he added.

The Nikkei gained 258.14 points to 17,096.31 as of 0525 GMT, after falling for the two previous sessions.

The broader TOPIX index was up 1.84 percent at 1,687.25.

Electronics components maker Kyocera, which makes some 60 percent of its sales overseas, jumped 3.8 percent to 11,260 yen.

Game-related stocks rose after Nintendo Co. Ltd. this week raised its operating profit estimate to a record 185 billion yen for the year to March 31 thanks to brisk sales of its DS handheld game consoles.

Shares of Nissha Printing Co. Ltd., which provides touch screens for Nintendo DS, jumped 9.6 percent to 4,240 yen, while Mitsumi Electric Co. Ltd., which supplies electronics parts to Nintendo, rose 3.5 percent to 2,655 yen.

Ahead of the central bank's Jan. 17-18 policy setting meeting, investors betting on a credit tightening bought up bank shares such as Mizuho Financial Group Inc, which rose 3.5 percent.

Fast Retailing, which runs the Uniqlo chain of casual-wear stores, dropped 15 percent to 9,460 yen as the company lowered its full-year profit forecast. Goldman Sachs said in a research note on Friday that the share price looked too high and downgraded the stock to ''sell'' from ''neutral''.

Fast Retailing Chief Executive Tadashi Yanai told Reuters in an interview on Friday that his firm aims to turn its loss-making U.S. operations profitable in the business year starting in September.

Fujiya Co. Ltd. plunged 5.7 percent, extending its losses from Thursday when the seller of sweets and cakes said it would halt production and pull products from its nearly 900 stores after it shipped pastries made using milk that was past its sell-by date.

REUTERS