* Suruga Bank soars after market prices in bad news - trader
* Toshiba surges on cost cut hopes
By Ayai Tomisawa
TOKYO, Nov 8 (Reuters) - Japan’s Nikkei surged on Thursday, tracking a rally in Wall Street after U.S. midterm elections produced no major surprises.
The Nikkei share average rose 1.8 percent to 22,481.58 points by midmorning trade, after hitting a 2-1/2-week high of 22,583.43 earlier.
The U.S. midterm election results were as the market expected; a split Congress with Democrats winning control of the House of Representatives and Republicans cementing their majority in the Senate.
Analysts said investors were buying back stocks on optimism that U.S. President Donald Trump’s corporate tax cuts, which have lifted corporate profits, will continue.
“Hopes of further fiscal stimulus also faded (under the possibility that Republicans would win both house) which could have fuelled inflation,” said Yoshinori Shigemi, a global market strategist at JPMorgan Asset Management.
“Those who were cautious before the election and waited to buy are now buying.”
He said the market was now focusing on a U.S. Federal Reserve rate decision later in the global day. The Fed is expected to keep rates on hold but raise them again in December, with more to come next year.
All but one of the Topix’s 33 subsectors were in positive territory. The broader Topix rose 1.8 percent to 1,681.43. Advancing issues outnumbered declining ones 1,851 to 225.
Suruga Bank jumped 20 percent to a daily limit-high after Reuters reported that the bank is expected to post a net loss of around 50 billion yen ($440.02 million)for the first half, compared to a net profit of initially-expected 12 billion yen, citing a person with direct knowledge.
Traders said that retail investors, who had sold the stock when they first speculated that the bank would post a loss, were covering their short positions after they got an indication about the size of the loss.
Toshiba Corp soared 5 percent after the Nikkei business daily said that the company’s next five-year plan features $1.8 billion in cost cuts.
Inpex Corp gained 5 percent after the mining company raised its net profit forecast to 60 billion yen from 48 billion yen for the year ending March 2019. It also hiked its annual dividend payout forecast to 24 yen per share from 18 yen per share. ($1 = 113.6300 yen) (Editing by Kim Coghill)