By Masayuki Kitano TOKYO (Reuters) - Japan's Nikkei average rose 4.3 percent on Friday as a rally in U.S. shares triggered short-covering, with exporters such as Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) getting a lift as a rise in the yen lost steam. Mizuho Financial Group (8411.T: Quote, Profile, Research, Stock Buzz), Japan's second-biggest bank, rose 3.7 percent after getting a boost from the market rally and on relief there were no major negative surprises from its earnings announcement on Thursday, market players said. U.S. stocks surged on Thursday and broke a three-day losing streak after the S&P 500 and Nasdaq touched new five-year lows earlier in the session, prompting investors to put aside worries about the flagging economy and step in to hunt for bargains. "We may see a rebound that erases the losses seen yesterday," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co Ltd, referring to Tokyo share prices. The benchmark Nikkei average .N225 rose 4.3 percent or 351.15 points to 8,589.79 by midday. It rose 5 percent at one point, mostly erasing its 5.3 percent decline on Thursday. The broader Topix index .TOPX rose 2.8 percent to 860.64. Trade was moderate on the Tokyo exchange's first section, with 1.07 billion shares changing hands, almost in line with last week's morning average. Advancing stocks beat declining ones by nearly 4 to 1. Mizuho Financial Group swung to a quarterly net loss and said on Thursday it will raise up to $3.1 billion, replenishing capital depleted by a weakening economy and overexposure to domestic stocks. ID:T203195 Exporters gained in the wake of the yen's pull-back from highs hit earlier in the week, with Honda surging 6.4 percent and Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) gaining 6.0 percent. Despite the rise in Tokyo shares on Friday, the outlook remained clouded by concerns over a global recession and the turmoil and volatility in financial markets. "People are still taking a wait-and-see approach," said Akino at Ichiyoshi Investment Management. "U.S. shares have been very volatile, moving 1,000 points in a day, which is abnormal. This is not a normal situation, and so there are concerns that come next week there could be another decline," he said. The Dow Jones industrial average .DJI swung sharply on Thursday, trading roughly between 7,965 and 8,876 during the session. The yen rose 0.7 percent against the dollar on Friday to 97.01 yen but was still down from a two-week high near 94.50 yen hit earlier this week. A near-term focal point was the leaders' summit of the Group of 20 industrialized and emerging nations in Washington on Friday and Saturday.

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