The Nikkei average rose 2.1 percent on Wednesday, after hitting its highest point in two months, as exporters such as Honda Motor surged on a softer yen and amid hopes for a U.S. stimulus package to boost the economy. The benchmark is poised to log its first seven-day winning streak in nearly three years. It has gained 6.6 percent in the past six days to Tuesday, including two half-days of trading before and after the New Year holiday. A newspaper report that Japan's government will seek to scrap capital gains taxes for foreigners investing in Japanese companies through funds also helped improve sentiment, market players said. They also said risk appetite was growing. "The extent of the improvement in risk tolerance is clearly reflected in the sharp gains in the prices of oil and other commodities over the past few days. It's not just the stock market," said Tsuyoshi Segawa, an equity strategist at Shinko Securities. "The Tokyo exchange's first section has recovered about 20 trillion yen in market capitalisation in the past seven days, and that will lift risk tolerance further." The benchmark Nikkei climbed 191.09 points to 9,271.93, after reaching its highest point since Nov. 6. If it closes the day higher, it will book its first seven-day winning run since the March-April period in 2006. The broader Topix rose 1.6 percent to 890.61. The dollar on Tuesday hit its highest against the yen since Dec. 1, partly on expectations that a stimulus package planned by U.S. President-elect Barack Obama will help the world's largest economy emerge from recession sooner than other industrialised nations. CARMAKERS CLIMB, TECHS GAIN Investors scooped up beaten-down sectors such as automakers, one of the poorest performers last year, amid improving risk appetite after a panic-ridden 2008, in which the benchmark Nikkei booked its worst year ever. Shares of Honda soared 12.8 percent to 2,245 yen, while Toyota Motor Co jumped 5.9 percent to 3,230 yen and Nissan Motor Co shot up 10.9 percent to 378 yen. Tech shares climbed after their U.S. peers rose as investors bet the sector would benefit from Obama's proposed package of spending and tax-cut measures that would total nearly $775 billion over the next two years. The Philadelphia Semiconductor Index rose 5.1 percent on Tuesday, lending strength to Tokyo shares. Canon Inc surged 13.1 percent to 3,360 yen and Sony Corp jumped 8 percent at 2,290 yen. Among other notable stocks, Sharp Corp jumped 11.9 percent to 892 yen, after it said it would bring forward the start of a new domestic solar cell plant to the end of this year. It had previously planned to start operating the plant in spring 2010. Ricoh Co Ltd advanced 7.7 percent to 1,305 yen after Credit Suisse upgraded the stock to "outperform" from "neutral" and raised its target share price to 1,400 yen, saying firmness in the North American market could counter earnings concerns about its subsidiary Ikon. (Reporting by Aiko Hayashi; Editing by Edwina Gibbs)

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