* Nikkei gains 2 pct, touches two-month high * Tech shares surge on hopes for U.S. economic package * Market may stay strong until Obama takes office * Weaker yen boosts exporters (Adds stocks, details) By Elaine Lies TOKYO, Jan 7 (Reuters) - Japan's Nikkei share average climbed 2 percent on Wednesday, touching a two-month high as tech shares such as Kyocera Corp (6971.T: Quote, Profile, Research, Stock Buzz) powered up on hopes for a U.S. economic stimulus package, while exporters rose on a weaker yen. Carmakers climbed, with Honda Motor Co (7267.T: Quote, Profile, Research, Stock Buzz) surging more than 9 percent as investors continued to buy up the beaten-down sector, one of the poorest performers in 2008. The Nikkei business daily reported that Japan's government will seek to scrap capital gains taxes for foreigners investing in Japanese companies through funds, which market players said could be having some impact. [ID:nT4537] But many also said gains might be limited by investor moves to lock in profits at the highs out of a sense that the Nikkei, which has risen for the past six trading days, may be overheated. "Though the market may be sustained by hopes for the Obama economic plan, around the time he takes office we'll start to see a lot of company results coming out, and things could start to get tough," said Takashi Ushio, head of the investment strategy division at Marusan Securities. "People say the market has factored in poor results, with something like 20-30 percent of firms likely to show losses, but what if that number rises to 40 percent? It's anyone's guess if that's been factored in." 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. [FRX/] Others said risk appetite may be recovering a bit as investors take a longer-term view, especially on the United States. "The United States certainly has a lot of economic problems but they seem to be tackling them, whereas Japan doesn't seem to be doing anything," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. "Though the immediate future seems pretty dark people are now looking towards 2010 and buying on expectations of recovery." The benchmark Nikkei .N225 gained 182.31 points to 9,263.15 by the midday break after earlier rising as far as 9,325.35, its highest since Nov. 6. The broader Topix .TOPX gained 1.7 percent to 890.69. CARMAKERS CLIMB, TECHS GAIN Some in the market said gains could be powered by a slow return of foreign investors, noting that hedge funds -- relentless sellers last year -- might be starting to get back in. According to orders placed before the start of trade, foreign brokers were set to be net buyers of Japanese stocks to the tune of 14 million shares. Hopes for a U.S. economic recovery were particularly at play in the case of carmakers, helping many beaten-down shares extend the sharp gains made earlier this week. Honda rose 9.5 percent to 2,180 yen, bringing its gains so far for 2009 to 14.4 percent. Toyota Motor Co (7203.T: Quote, Profile, Research, Stock Buzz) rose 4.6 percent to 3,190 yen and Nissan Motor Co (7201.T: Quote, Profile, Research, Stock Buzz) climbed 9.4 percent to 373 yen. Tech shares were particularly strong performers 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. Kyocera surged 7.4 percent to 7,270 yen, becoming the biggest contributor to the Nikkei 225 by volume weight, followed by Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz), which gained 11.1 percent to 3,300 yen. Advantest Corp (6857.T: Quote, Profile, Research, Stock Buzz) climbed 7.5 percent to 1,642 yen and Tokyo Electron (8035.T: Quote, Profile, Research, Stock Buzz) gained 7.5 percent to 3,740 yen. Blue-chip exporters rose across the board, with Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) up 6.8 percent at 2,265 yen and Panasonic (6752.T: Quote, Profile, Research, Stock Buzz) climbing 6.3 percent to 1,265 yen. Ricoh Co Ltd (7752.T: Quote, Profile, Research, Stock Buzz) surged 10.2 percent to 1,335 yen after Credit Suisse upgraded the stock to "outperform" from "neutral" and raised its target share price to 1,400 yen from 1,150 yen, saying firmness in the North American market could counter earnings concerns about its subsidiary Ikon. Trade was active on the Tokyo exchange's first section, with 1.4 billion shares changing hands, compared with 975 million shares logged on Tuesday morning.

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