Tokyo stocks rise on soft yen, exporters up

TOKYO, Aug 27 (Reuters) The Nikkei average rose 1.3 percent by midmorning on Monday, buoyed by Wall Street's gains and a softer yen, with high-tech exporters such as Sony Corp higher, but gains were expected to be limited by profit-taking and concern about the U.S. economy.

Mitsubishi UFJ Financial Group Inc rose 2.6 percent to 1.16 million yen after it bought a A8 million stake in Australia's Challenger Financial Services Group.

The yen fell broadly after a continuing recovery in global stocks renewed investor appetite for riskier bets, including those that involve selling the low-yielding Japanese currency for assets in higher ones.

''Japanese investors are focusing on Wall Street, with the rise there and a sweep of good indicators leading to buying, with help from the weaker yen,'' said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities Co. Ltd.

The market is keeping one eye on a cabinet reshuffle later in the day, but little immediate impact was expected, with attention more on what the new government will do to improve Prime Minister Shinzo Abe's lagging support rates.

The benchmark Nikkei index was up by 203.38 as of 0043 GMT to 16,452.35 while the broader TOPIX index rose by 1.4 percent to stand at 1,607.65.

Exporters were generally higher, with Sony Corp up by 1.7 percent at 5,510 yen and Honda Motor Corp up by 2.4 percent at 3,790 yen.

Financial issues also gained, with Mitsubishi UFJ leading the way. As a sector, banking stocks were up by 2 percent.

Shares of Takai Carbon Co Ltd soared 4.9 percent to 1,343 yen after Mitsubishi UFJ Securities raised its price target to 2,000 yen from 1,580 yen, citing a rise in export prices of artificial graphite electrodes.

REUTERS AK BST0642