* Slightly stronger yen limits gains
* Bank shares rise on U.S. deregulation moves
* Auto sector in spotlight, Toyota, Suzuki release earnings
By Ayai Tomisawa
TOKYO, Feb 6 Japan's Nikkei share average rose
on Monday morning as bank stocks soared following moves by U.S.
President Donald Trump to reduce regulation in the financial
sector, but a slightly stronger yen kept gains limited.
The Nikkei rose 0.2 percent to 18,956.45 in
Traders said that most investors are expected to stay on the
sidelines before Japanese Prime Minister Shinzo Abe meets U.S.
President Donald Trump on Feb. 10 and 11, with trade and
currencies likely to be on the agenda.
The Nikkei was not straying far from the 19,000-line, with
investors cautious over Trump's policies. Last week, stocks
tumbled after Trump signed an executive order restricting travel
for individuals from seven Muslim-majority countries.
On Monday, the banking sector rose after he signed executive
actions directing a review of the Dodd-Frank law. [ ]
"Trump's protectionist view and his other policies aimed at
stoking U.S. growth are two sides on the same coin," said
Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center.
"People are currently focused on the negative side right now,
but if his policy on tax cuts and fiscal stimulus get underway,
people would realize that his policies could help mid-to-long
term gains in the stock market."
Japanese banks which do business in the United States surged
on deregulation hopes in the U.S. financial industry.
The banking sector rose 2.0 percent and was the
second best performer on the board. Mitsubishi UFJ Financial
Group surged 4.0 percent, while Sumitomo Mitsui
Financial Group gained 1.3 percent.
Japan's auto sector was under the spotlight as well.
Honda Motor Co advanced 3 percent after it raised
its annual net profit forecast for the second time.
Takata Corp was untraded with a glut of sell orders
after sources said it had selected Key Safety Systems (KSS) as
the final bidder for its restructuring, raising a concern that
the U.S. auto parts supplier could lead Takata into a
Meanwhile, Toyota Motor Corp and Suzuki Motor Corp
appeared poised to unveil a wide-ranging partnership on
Monday that could include the development of new technologies
and procurement. Toyota was up 0.1 percent, while Suzuki dropped
1.0 percent in mid-morning trade.
Both automakers are scheduled to release their third-quarter
earnings after the market close.
The broader Topix gained 0.4 percent to 1,520.52 and
the JPX-Nikkei Index 400 added 0.3 percent to
(Editing by Simon Cameron-Moore)