(Corrects Nikkei milestone in paragraph 3 to a 4-year high instead of a 33-month high)
By Tomo Uetake
TOKYO (Reuters) - Japan's Nikkei share average jumped 2.3 percent by the midday break on Monday, led by exporters and banks after the yen softened following the G20's decision not to single out Japan for adopting policies that weakened its currency.
The Nikkei added 251.61 points to 11,425.44, with financials and real estate contributing to the benchmark's gains as investors welcomed the G20's apparent approval of Japan's reflationary policies as a sign that they can be pursued without inviting trade friction.
The benchmark is now just 0.6 percent away from the 4-year high of 11,498.42 it struck on February 6.
"Individual stocks are not driving the market today - it's rather futures, or derivatives-related flows. It's mainly dominated by hot money," said Kyoya Okazawa, head of global equities at BNP Paribas.
Japan's top three banks were among the five most-traded stocks. Mitsubishi UFJ Financial Group Inc <8306.T> led the gains, jumping 4.9 percent, while Mizuho Financial Group Inc <8411.T> and Sumitomo Mitsui Financial Group Inc <8316.T> were close behind, putting on 4.1 and 4.5 percent respectively. The banking sub-index <.IBNKS.T> was the best-performing sector on the main board, rising 4.6 percent.
The real estate sub-index <.IRLTY.T> was the third best, advancing 3.5 percent. Mitsubishi Estate Co Ltd <8802.T> and Tokyu Livable Inc <8879.T> both advanced 4.1 percent.
A statement issued by G20 policymakers at the weekend did not single out Japan, though it said members should refrain from competitive devaluations and that monetary policy should be directed only at price stability and growth.
"At the G20 meeting, there wasn't as much criticism from emerging countries about the recent yen's weakness as feared. That spurred yen selling," said BNP Paribas's Okazawa.
Investors took the G20's statement as a signal to continue the one-way bets against the yen that paused last week before the meeting. By mid-morning, the yen was trading at 94.15 to the dollar just above a 33-month low of 94.465 struck last Monday.
"There is not much else to go on today except the currency, so everything depends on where the yen goes," said Toshiyuki Kanayama, senior market analyst at Monex.
The broader Topix rose 2.2 percent to 962.88, in slightly thinner trade than in the last fortnight. By the midday break, volume had reached 66.4 percent of its full-day average over the last 90 sessions.
Yen weakness has helped the benchmark gain about 30 percent since mid-November, when Shinzo Abe, then leader of the opposition and now prime minister, began calling for bolder fiscal and monetary policy to pull Japan out of deflation.
Shares of carmakers, whose overseas revenues will be swollen by a softer yen, advanced in heavy trade. Toyota Motor Corp <7203.T> added 2.3 percent, while Honda Motor Co Ltd <7267.T> gained 2.6 percent.
LOSING THE GAME?
Online game platform operator DeNA Co Ltd <2432.T> shed 2.6 percent after the Nikkei business daily mentioned its disappointing foray into overseas markets when it revealed games makers Konami Corp <9766.T> and Capcom Co Ltd <9697.T> are aiming to expand abroad.
"The foreign market has not been good for DeNa, which also only gets a small cut as a games platform rather than a maker," said Yasuo Sakuma, portfolio manager of Bayview Asset Management.
"There are no gross expectations for DeNA now. The rules of the games industry have changed - the old winners are now losers."
Konami gained 1.6 percent while Capcom added 0.1 percent on the news on Monday morning.
By contrast, Sakuma singled out shares of Gungho Online Entertainment Inc <3765.OS>, which have jumped more than tenfold since last July due to the popularity of its Puzzles and Dragons games. Gungho's shares were up 20 percent during the morning session.
(Additional reporting by Sophie Knight; Editing by Eric Meijer)
