Nikkei posts biggest 1-day gain in 3-weeks, up for seventh straight month
* Nikkei rises 2.7 pct helped by futures-led purchases
* Well-bid Italian debt sale, upbeat U.S. data buoy sentiment
* Exporters, real-estate stocks outperform
TOKYO, Feb 28 (Reuters) - Japan's Nikkei average climbed 2.7 percent on Thursday to post a seventh straight monthly rise, its longest such winning streak since 2006, underpinned by easing concerns over political turmoil in Italy and upbeat U.S. economic data. The Nikkei rose 305.39 points to 11,559.36, breaking above its five-day moving average of 11,452.12 and nearing its 53-month high of 11,662.52 hit on Monday, and was up 3.8 percent in February. Thursday's move marked the biggest one-day percentage rise in three weeks. "The Nikkei made up ground lost in the previous session, thanks to futures-led purchases associated with Nomura (Asset Management)'s launch of two investment trusts," said Mitsushige Akino, executive director at Ichiyoshi Asset Management. A trader at a Japanese brokerage said the trusts with a combined size of about 75 billion yen ($820 million) were picking up stocks in the market, driving the Nikkei higher. Currency-sensitive stocks that were heavily sold off in the previous two sessions also helped the bounce, with Toyota Motor Corp up 3.5 percent, Honda Motor Co gaining 3.8 percent and Canon Inc adding 4 percent. "It was certainly a great chance to buy" after the past two days, said Stefan Worrall, director of equity sales at Credit Suisse in Tokyo. "What we had coming into this week was some suggestion that the market was stretched. The market was due for a correction. It was well telegraphed and well discussed. There had been other factors too contributing to the uncertainty, such as the Italian election." Sentiment on the day got a boost from U.S. Federal Reserve Chairman Ben Bernanke restating the Fed's commitment to monetary stimulus, while Wednesday's better U.S. economic data also underpinned risk appetite. A gauge of planned U.S. business spending recorded its largest increase in more than a year in January and contracts to buy previously owned U.S. homes approached a near three-year high last month. Investors were also relieved after a well-bid Italian debt auction. Italy's borrowing costs rose to their highest in four months on Wednesday at the first bond auction since this week's inconclusive election but solid demand from domestic investors eased fears that the political deadlock could destabilize Europe's second-biggest sovereign debt market. The broader Topix index gained 2.3 percent to 975.66 in relatively active trade, with 3.29 billion shares changing hands. Last week's average daily volume was 2.93 billion shares.
RETESTING 53-MONTH HIGH Analysts said the short-term correction seems to have run its course and the Japanese market is heading towards retesting the 53-month highs next week mainly on hopes for aggressive easing. On Thursday, as widely expected, Prime Minister Shinzo Abe nominated Asian Development Bank President Haruhiko Kuroda, an advocate of monetary easing, as its next central bank chief, and academic Kikuo Iwata and BOJ official Hiroshi Nakaso as BOJ deputy governors. The benchmark Nikkei has rallied nearly 32 percent since mid-November as the yen weakened after Abe's administration pursued bold fiscal expansionary policies and aggressive monetary easing aimed at reviving the economy. The real estate sector was the second best sectoral performer, up 4.6 percent. Among other notable gainers, GS Yuasa Corp, which makes lithium-ion batteries for the Dreamliner, surged 7.5 percent after Boeing Co said there was no dispute with the Japanese firm about the proposed battery fix.
Komatsu Ltd rose 3.7 percent after the Nikkei newspaper said the construction machinery maker was expected to forecast a 30 percent jump in operating profit for the fiscal year ending March 2014 from its estimate of 230 billion yen for this business year.