Japan shares rise on US government bailout plan

The benchmark Nikkei 225 index advanced 169.73 points, or 1.42 percent, to 12,090.59, closing above the key 12,000 level for the first time since Sept. 12. The broader Topix index added 1.70 percent to 1,168.69.

Global markets rallied Friday on news of a possible U.S. government plan to rescue banks from risky mortgage debt.

While the move boosted sentiment initially, analysts said markets are on watch for further details of the plan.

"The first key hurdle is for Congress to reach a speedy decision on the various points of contention in the package, such as the extremely wide discretion given to the Treasury, and questions of financial institution responsibility," said Merrill Lynch economists Masayuki Kichikawa and Takuji Okubo in a research memo.

"Also of key importance will be the market reaction to the measures, including the need for public fund injections into financial institutions, something which so far is not included in the U.S. plan," they said.

On the political front, brash conservative Taro Aso easily won the presidency of Japan's struggling ruling party Monday, putting him in line to take over as prime minister this week amid political and economic turmoil.

Aso, 68, is known as a fiscal expansionist and is expected to push for an increase in public spending.

Japan's central bank pumped another 1.5 trillion yen (US$14.1 billion) into short-term money markets, the ninth injection over five straight working days, bringing the total to 12.5 trillion yen (US$117.4 billion) since the dramatic fall of Wall Street titans Lehman Brothers and Merrill Lynch.

Sumitomo Mitsui Financial Group, Inc. rose 2.58 percent to 676,000 yen, Mizuho Financial Group. Inc. advanced 2.91 percent to 460,000, and Resona Holdings jumped 10.13 percent to 147,900 yen.