Japan's Nikkei jumps on ECB bond plan

US-MARKETS-JAPAN-STOCKS:Japan's Nikkei jumps on ECB bond plan

By Sophie Knight

TOKYO (Reuters) - Japan's Nikkei share average climbed 1.8 percent on Friday morning after the European Central Bank outlined its long-awaited bond buying scheme to bring down borrowing costs in heavily indebted euro zone nations.

Investors covered bearish bets and exporters were also lifted as the euro rallied to a two-month high against the Japanese currency on hopes that the ECB's plan would draw a line under the euro zone debt crisis.

The Nikkei <.N225> reached 8,832.55, breaking above its 13-week moving average at 8,810.60.

"The ECB gave investors what they were hoping for, which is obviously positive for equities," said Masayuki Doshida, senior market analyst at Rakuten Securities.

"However, doubts will remain about the details - the necessary criteria, the time frame, a target for German bond yield spreads."

ECB President Mario Draghi, backing up his July pledge to do whatever it takes to preserve the euro, said the central bank's plan for bond-buying would address bond market distortions and "unfounded" fears of investors about the survival of the euro.

Germany's constitutional court has still to rule on the proposed European Stability Mechanism (ESM) rescue fund next week, which may stymie the ECB's ability to help indebted nations.

"Germany could yet throw a spanner in the works, which means the bond-purchasing plan is seen in a negative light by next week," cautioned Makoto Kikuchi, CEO at Myojo Asset Management. "The Nikkei's gains will also be limited unless the U.S. jobs figures exceed market expectations today."

In the United States, stronger-than-expected service sector jobs data on Thursday boded well for the non-farm payroll figures to be released later on Friday, boosting sentiment for riskier assets.

U.S. stocks rose to highs not seen since January 2008. By comparison, the Nikkei is still off about 37 percent from the same date, and is just 4.5 percent up on the year, compared with the S&P 500 <.SPX>'s 13.9 percent gain since January.

A softer yen helped exporters Toyota Motor Co <7203.T>, Honda Motor Co Ltd <7267.T>, and Nissan Motor Co <7261.T> up between 1.9 and 3.6 percent, although analysts warned the relative strength of the yen meant the Tokyo market was unlikely to maintain momentum on the ECB plan.

"Even though overseas equities may continue rising, having had a touch of the 'Draghi magic', the strong yen has meant that Japanese stocks no longer track U.S. stock markets as closely as they used to," said Takashi Oba, senior strategist at Okasan Securities.

The broader Topix <.TOPX> advanced 1.56 percent to 730.19.

APPLE BOOSTS TOSHIBA

NAND chipmaker Toshiba Corp <6502.T> jumped 5.1 percent after a source said Apple Inc <AAPL.0> has reduced its order for memory chips for its new iPhone from Samsung Electronics Co <005930.KS>, instead picking Toshiba and other competitors as its suppliers.

Securities <.ISECU.T> were the best-performing sector with a gain of 4.1 percent, helped by a 4.5 percent gain for Nomura Holdings <8604.T> after it announced cuts in its equities and investment banking businesses as part of a wider effort to slash $1 billion in costs.

The iron and steel sector <.ISTEL.T> climbed 4 percent, regaining some ground after losing 9.4 percent last week as iron ore prices sank to three-year lows.

But Japan Tobacco <2914.T> sagged 6 percent and was the second most-traded stock on the main board by turnover, after the French government said it was considering raising the tobacco tax by 6 percent in October.

Japan Tobacco has a 16.4 percent share of the French market. A French daily said a one-off tax may also be levied on the tobacco industry to finance new anti-tobacco laws. ($1 = 78.9700 Japanese yen) ($1 = 0.7915 euros)

(Additional reporting by Dominic Lau; Editing by Richard Pullin)

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