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* Nikkei up 1 pct, Topix rises 1.1 pct * Sony tumbles after saying to issue convertible bonds * Banks in demand after H1 results By Dominic Lau TOKYO, Nov 15 (Reuters) - Japan's Nikkei average rose to a one-week high on Thursday, supported by gains for exporters as hopes that a new government could lead to easier monetary policy weakened the yen, but Sony Corp tumbled on a fundraising plan. By the midday break, the Nikkei advanced 1 percent to 8,748.29 Points, breaking above its five-day moving average at 8,701.62, as investors shrugged off concerns about the prospect of protracted negotiations to resolve fiscal gridlock in the United States. Sony slumped 10.6 percent after the consumer electronics maker said it will raise $1.9 billion through a sale of convertible bonds, a third of which will be used for investment in scandal-hit Olympus Corp. It was the most traded stock on the main board by turnover. But other exporters bounced as the yen traded at 80.19 to the dollar, not far from a one-week low of 80.31 yen touched on Wednesday after Prime Minister Yoshihiko Noda unveiled plans to dissolve parliament's lower house on Friday for a snap election on Dec. 16. The main opposition Liberal Democratic Party (LDP) is expected to win the poll. Among the exporters, Toyota Motor Corp, Honda Motor Co, Canon Inc and industrial robot maker Fanuc Corp climbed between 1.8 and 3.1 percent. "Everyone is expecting Shinzo Abe from the LDP to be the next prime minister. He will pressure the BOJ to conduct bold monetary easing by setting a 2 to 3 percent inflation target," said Shun Maruyama, chief Japan equity strategist at BNP Paribas. "In the near-term, we can be bullish on the Nikkei and bearish on the Japanese yen." Comments by U.S. President Barack Obama that he won't sign off on more tax cuts for the wealthy, and unyielding remarks from Republican leaders earlier this week, signal a long period of negotiation and brinkmanship that could leave a cloud of uncertainty over the economy. Worries over the so called "fiscal cliff" in the United States have been weighing on global equities, including Japanese stocks, with the Nikkei falling for seven sessions in a row from Nov. 5 to 13. The benchmark had lost 4.3 percent during the losing streak, its longest such run in seven months. But it is still up 3.5 percent so far this year. The broader Topix rose 1.1 percent to 730.58 in active trade in Thursday's morning session, with volume at 65 percent of its full daily average for the past 90 days. NEAR-TERM POSITIVE "If the new cabinet took a more proactive line on monetary policy, the appointment of the new (BOJ) governor and deputy governors could reflect that orientation," Nomura strategists wrote in a note. "We might also see expectations for an improvement in the chilly relationship with China and for government spending. We think such expectations would produce a positive response on the equity markets, at least in the near term." But a trader said he doubted an LDP government would have any long-term positive impact on the Nikkei as the party was in power for a long time before Noda's Democratic Party of Japan kicked it out of office in 2009, and it had not been able to pull the country out of deflation during its tenure. For now, though, investors were upbeat. Japan's megabanks were in demand after they reported their first-half results after the market close on Wednesday. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group were up between 2.5 and 3.2 percent. BNP Paribas's Maruyama said it was "a bit risky" to chase exporters given the fiscal issue in the United States and the euro zone debt crisis. Banks and real estate companies were the best bet to play the rally in Japanese equities in the short-term, he added. The real estate sector climbed 2.4 percent, with Sumitomo Realty & Development Co Ltd up 3.5 percent and Mitsui Fudosan Co Ltd adding 2.6 percent. Social gaming company Gree Inc shed 2.3 percent, however, after it disappointed the market with poor results for the first quarter ended September.