* Nikkei rises in early trade, on track for weekly gain
* Investors remain wary of U.S. political stalemate
* Fast Retailing tumbles on disappointing earnings
By Tomo Uetake
TOKYO, Oct 11 (Reuters) - The Nikkei stock average climbed
more than 1 percent to a 1-1/2-week high on Friday on hopes for
progress in the United States towards ending the fiscal
standoff, with exporters like Nikon Corp gaining as then yen
pulled back from a recent high.
The benchmark Nikkei rose 1.3 percent in midmorning
trade to 14,375.02, its highest level since Oct. 2. It was on
track for a 2.5 percent gain on the week.
"Just a whiff of resolution on the U.S. ceiling debate saw a
sharp risk-on and short squeeze, although it was just a whiff.
You can see how much the debt impasse has been weighing on
markets," said Stefan Worrall, director of equity cash sales at
Credit Suisse in Tokyo.
"The focus, the key question into the next week, is if this
impasse has moved a step closer to being resolved. Everything
else has fallen into the background, even earnings."
House Republican leaders on Thursday offered a plan to
extend the government's borrowing authority for several weeks,
and the White House said it would consider the proposal,
sparking a big rally on Wall Street.
The New York Times later reported President Barack Obama had
rejected the plan, but Republican Paul Ryan told reporters Obama
had neither accepted or rejected the proposal.
The broader Topix climbed 1.6 percent to 1,196.60.
Trade was moderate, with volume at 42.8 percent of its full
daily average for the past 90 trading days.
All 33 Topix subindexes were higher, with financials leading
the gains. The banking sector and the securities
sector rose 2.5 percent and 2.1 percent,
Exporters advanced as the dollar strengthened against the
yen. Nikon Corp jumped 4 percent, while Panasonic Corp
and Daikin Industries Ltd both rose 2.9 percent.
The greenback was last quoted 98.45 yen, well off a
two-month low of 96.55 set on Tuesday. A weaker yen helps
Japanese exporters' competitiveness in global markets and boosts
their dollar earnings when repatriated.
Toyota Motor Corp rose 0.9 percent and was the
third-most traded stock on Topix. A jury in California on
Thursday found the carmaker was not liable in one of the first
wrongful-death lawsuits to go to trial in the United States over
alleged defects that caused some vehicles to unexpectedly
But Nikkei heavyweight Fast Retailing Co Ltd lost
as much as 5.4 percent to hit a five-week low after the Uniqlo
clothing chain operator's full-year operating profit came in
below its own target as heavy discounting depressed margins.
It was the second-most traded stock by turnover
on the main board.
The Nikkei has gained 38 percent this year but is still down
10 percent from its May peak.