Nikkei hits 1-month closing high; JAL, Aiful sink
* Nikkei plays catch-up after 5-day weekend
* Short-covering in futures leads gains - fund manager
* JAL dives after news of potential split, public fund report
* Consumer lender Aiful plunges as warns of loss
* G20 meeting on Sept. 24-25 eyed
TOKYO, Sept 24 (Reuters) - Japan's Nikkei average rose 1.7percent to a one-month closing high on Thursday, lifted byexporters such as Kyocera Corp (6971.T) as investors playedcatch-up after returning from a string of public holidays.
Fast Retailing Co (9983.T) jumped after Goldman Sachs raisedits rating on the stock to "buy" from "neutral", while ToshibaCorp (6502.T) climbed after Credit Suisse upgraded the stock to"outperform" from "neutral" and hiked its target price.
But Japan Airlines (9205.T) and consumer lender Aiful(8515.T) continued to be dogged by negative news.
JAL tumbled nearly 16 percent after sources said the companymight be broken up and public broadcaster NHK reported it isplanning to seek a taxpayer-funded bailout to overhaul itsoperations. [ID:nT38558]
Aiful shares plunged about 24 percent after the lender saidit would halve its workforce and slash branch numbers as itwarned of a $3.4 billion loss for the year to March 2010.[ID:nT33949]
"Gains are due to a catch-up in the market led byshort-covering in stock futures," said Mitsushige Akino, chieffund manager at Ichiyoshi investment Management.
"Japanese stocks couldn't keep up with gains in U.S. stocks,particularly before the holiday here, on concerns about astronger yen. Now that the holiday is over and Wall Street didn'tfall significantly during that time, investors are picking upstocks."
In active trade, the benchmark Nikkei .N225 gained 173.68points to 10,544.22, its highest finish since Aug. 26. It slipped0.7 percent last week.
The broader Topix added 1.2 percent to 950.20.
U.S. stocks fell on Wednesday, dented by profit-taking and asinvestors worried the Federal Reserve is closer to pulling backon extraordinary measures to inject funding to shore up theeconomy. [.N] [ID:nN23390829]
Yumi Nishimura, deputy general manager at Daiwa SecuritiesSMBC, said the market will closely watch the Group of 20 meetingon Thursday and Friday, though few surprises are expected.
Leaders of the G20 countries meet in Pittsburgh in the UnitedStates, their third gathering since the collapse of investmentbank Lehman Brothers a year ago and with their the focus nowshifting from combating the worst recession since the 1930s todiscussing how to prevent it from happening again. [ID:nLH78576]
"Improvement in the macro economy has been factored in, andthe focus will likely shift to corporate earnings from the latterpart of next week," Nishimura said.
JAL, AIFUL TROUBLES
JAL lost 15.8 percent to 144 yen. Earlier this week, twosources familiar with the matter said lenders to JAL may seek tosplit the carrier between its profitable and loss-making parts.[ID:nT38558]
"Nothing's sure about JAL's future. It's already Japan's GM,"said Mizuho Investors Securities analyst Takahiko Kishi.
"JAL would have to come up with really drastic restructuringto convince lenders or the government, but even if they do so,the market would doubt whether such measures could really beimplemented."
Aiful, which last week asked creditors to let it push backrepayments on $3 billion in debt, said it plans to cut about2,000 jobs, or about 49 percent of the group's total workforce,by February. [ID:nWNAB2629]
It tumbled 23.9 percent to 102 yen.
Uncertainty in the financial sector also hurt shares of majorbanks. Mitsubishi UFJ Financial Group (8306.T) fell 0.4 percentto 527 yen and Mizuho Financial Group (8411.T) shed 5.2 percentto 184 yen.
But shares of Fast Retailing shot up 5.3 percent to 11,140yen. Goldman Sachs said concerns about fall and winter sales areunwarranted and cited the earnings potential of its operations inAsia.
Toshiba climbed 3.8 percent to 496 yen. Credit Suisse citedexpectations for a major turning point for NAND-type flash chipprofit structure from volatility to stability.
Exporters gained, with electronics parts maker Kyoceraclimbing 4.5 percent to 8,440 yen, while Honda Motor (7267.T)advanced 1.6 percent to 2,875 yen and Tokyo Electron Ltd (8035.T)jumped 5.7 percent to 5,900 yen.
Sony Corp (6758.T) gained 3.1 percent to 2,670 yen. A Sonyexecutive said on Wednesday that sales of the PlayStation 3 videogame console jumped in the weeks after a $100 price cut lastmonth, and strong demand could lead to empty shelves atretailers. [ID:nN23396815]
Some 2.4 billion shares changed hands on the Tokyo exchange'sfirst section, above last week's daily average of 1.9 billion.
Advancing stocks outnumbered declining ones by nearly 5 to 1. (Additional reporting by Mariko Katsumura; Editing by ChrisGallagher)
Source: Reuters
