Reuters Friday January 18 2008 (Updates to midafternoon) TOKYO, Jan 18 (Reuters) - Japan's Nikkei average erased earlier losses and rose 0.8 percent on Friday, lifted by expectations that President George W. Bush will propose measures to boost the flagging U.S. economy. Industrial robot maker Fanuc Ltd, one of the biggest drags on the Nikkei in the morning, reversed course and gained 2.9 percent to 9,260 yen. Bank shares like Mitsubishi UFJ Financial Group also pared earlier losses as investors started to shift their attention to coming events. Bush is to speak later in the day in general terms about what kinds of economic measures he would like to see. With technicals and valuations strongly suggesting Japanese stocks have been oversold, many participants see the market as ripe for a rebound. "By now, selling has pretty much run its course, and in this situation a single event could trigger an upward move," said Ryuta Otsuka of Toyo Securities. As of 0520 GMT, the Nikkei average rose 0.8 percent to 13,892.51, and the broader TOPIX index was up 0.9 percent at 1,341.94. Both indexes fell more than 3 percent earlier in the day. Mitsubishi UFJ rose 0.5 percent to 977 yen and Mizuho Financial Group Inc climbed 0.8 percent to 487,000 yen. In Osaka, Nintendo Co Ltd also reversed earlier losses to gain 3.6 percent to 55,200 yen.