Nikkei edges up, financials gain on rescue hopes

*Nikkei up in final moments on hopes Wall Street may rise

*Financials climb on investment plans, Nomura surges

*Investor worries linger, boosting defensive shares (Adds details, shares)

By Elaine Lies

TOKYO, Sept 24 (Reuters) - Japan's Nikkei stock average edged up 0.2 percent on Wednesday, led higher as Nomura Holdings Inc (8604.T: Quote, Profile, Research, Stock Buzz) and other financials gained on hopes that planned investments in U.S. banks would help the sector.

Nomura surged after the company said it would buy the Asian and European operations of failed U.S. investment bank Lehman Brothers (LEHMQ.PK: Quote, Profile, Research, Stock Buzz), and Sumitomo Mitsui Financial Group (8316.T: Quote, Profile, Research, Stock Buzz) (SMFG) rose after media reports said Japan's third-largest bank planned to invest in U.S. investment bank Goldman Sachs.

The decision by Warren Buffett's Berkshire Hathaway to invest $5 billion in Goldman Sachs was also lending support, market players said.

But investor worries about the overall economy lingered, boosting defensive shares such as pharmaceuticals, while exporters slid on a firmer yen and kept gains capped.

"Even if the U.S. financial situation is cleared up, worry about the underlying health of the global economy will remain, especially given that economic weakness is growing in Europe," said Masayuki Yamagishi, a strategist with Mitsubishi UFJ Securities.

"Investors are still wondering how much real impact the U.S. government rescue plan will have, plus it still hasn't been approved by Congress," he said.

U.S. lawmakers scoffed at the huge size of the proposed bailout -- with a $700 billion price tag -- and its lack of detail, and U.S. stocks closed down about 1.5 percent on Tuesday on the lack of certainty over when and how Washington would act. [ID:nLN230451]

Nomura soared 5.2 percent to 1,505 yen after Japan's top broker said it would buy the Asian and European operations of Lehman Brothers to help it expand overseas. [ID:nLN452124]

Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz) advanced 4.2 percent to 936 yen after Japan's largest bank said it would take a stake in U.S. investment bank Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) [ID:nLN199661], while SMFG gained 1.2 percent to 684,000 yen even though the company said it had no plans for an investment in Goldman Sachs at the moment.

"Japanese banks have up to now not extended themselves so much overseas, so these support moves are being taken as positive by investors here," said Takashi Ushio, head of the investment strategy division at Marusan Securities.

The benchmark Nikkei .N225 ultimately gained 24.44 points in the final moments of trade to 12,115.03. The broader Topix was down 0.1 percent at 1,167.97 after earlier falling more than 2 percent.

DOUBTS DRIVE DEFENSIVES

Though some market players said Tokyo shares erased losses on hopes that Wall Street may rebound, others were doubtful.

"I'm not sure that gains in financials alone will be enough to help Wall Street rise," said Tomomi Yamashita, a fund manager at Shinkin Asset Management.

Many investors seemed to share his wariness, helping drive defensive stocks, particularly pharmaceuticals and communications-linked shares, higher.

Eisai Co Ltd (4523.T: Quote, Profile, Research, Stock Buzz) rose 4.8 percent to 4,150 yen, among many pharmaceuticals helping to lift the Nikkei. Shionogi & Co Ltd (4507.T: Quote, Profile, Research, Stock Buzz) gained 7.6 percent to 2,275 yen.

Takeda Pharmaceutical Co (4502.T: Quote, Profile, Research, Stock Buzz) gained 2.7 percent to 5,400 yen after saying on Wednesday it had applied for approval to market in the United States the SYR-322 and the Actos diabetes drugs in a single tablet for the treatment of type 2 diabetes. [ID:nT170082]

NTT Data Corp (9613.T: Quote, Profile, Research, Stock Buzz) was the second-biggest contributor to the Nikkei 225 by volume weight, climbing 5.2 percent to 443,000 yen, followed closely by KDDI Corp (9433.T: Quote, Profile, Research, Stock Buzz), which rose 3.3 percent to 598,000 yen.

Soy sauce giant Kikkoman Corp (2801.T: Quote, Profile, Research, Stock Buzz) gained 4.6 percent to 1,448 yen.

But weighing on the market were exporters, including Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz), which was down 3 percent at 4,220 yen on a firmer yen. Industrial robot maker Fanuc Inc (6954.T: Quote, Profile, Research, Stock Buzz) lost 3.1 percent to 8,370 yen, becoming the biggest drag on the Nikkei by volume weight.

Trade was light on the Tokyo exchange's first section, with 2.04 billion shares changing hands, below last week's daily average of 2.46 billion.

Advancing stocks beat declining ones, 867 to 750. (Reporting by Elaine Lies; Editing by Chris Gallagher)