Nikkei climbs 2.6% on BoA rescue

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Goldman Sachs head apologises for financial crisisOil rises further in Asian tradeUS recession ends, unofficially

Tokyo: Japan's Nikkei average climbed 2.6 per cent on Friday, with investors reassured by a US government rescue for Bank of America Corp including a $20 billion injection and a guarantee for almost $100 billion of potential losses on toxic assets.

A retreat in the yen helped lift exporters such as Honda Motor Co, while chip shares climbed after encouraging comments from Intel Corp.

A late wave of short-covering even lifted Hitachi Ltd out of the negative territory where it had been after sources said it would likely post an annual net loss of more than $1.1 billion.

"Basically investors have been shown that the US government will do what is needed," said Tomomi Yamashita, a fund manager at Shinkin Asset Management.

The benchmark Nikkei gained 206.84 points to 8,230.15 after briefly climbing over 3 per cent in the last hour of trade.

It lost 6.9 per cent on the week for its second consecutive week of losses, the first such stretch since mid-November. On Thursday it briefly broke below 8,000 to its lowest point in more than a month.

Investors wary after Thursday's tumble and a week of volatile trade had kept trade thin until the Bank of America news broke, helping them regain some confidence.

Under an emergency plan announced by the US Treasury Department, the US Federal Reserve and Federal Deposit Insurance Corp, the Treasury will provide the largest US bank by assets with the $20 billion in fresh capital from a government bailout fund in exchange for preferred stock.

Doing What's Needed

"This shows that they're not going to have another Lehman, that they're managing to deal with the various financial problems," said Hideyuki Ishiguro, a supervisor in the investment strategy department of Okasan Securities.

"This also suggests to investors that all needed steps are being taken to tackle the economy, and that though it won't show up in indicators for a while, this sense will be verified over the coming months."

But investors still nervously await earnings results from Bank of America and Citigroup later on Friday, with Citi also expected to announce more losses and lay out a strategic plan.