Japan's Nikkei Index Rises 0.3 Percent

But concern over the exposure of insurance companies to the problems in the U.S. mortgage market dragged down the broader Topix index of all the Tokyo Stock Exchange First Section issues.

The Topix fell 1.34 points, or 0.09 percent, to 1,437.38. The index now has declined 20.9 percent from its 2007 high of 1,816.97 on Feb. 26, indicating that the broader gauge of equity prices in the world's second-largest economy might be entering a bear market.

A bear market is usually defined as a decline of 20 percent or more in a 12-month period.

Finance Minister Fukushiro Nukaga and Bank of Japan board member Seiji Nakamura both expressed concern about the continuing problems in the U.S. housing and banking sectors from the subprime mortgage crisis.

Nukaga said he was cautious about the outlook for Japan's economy and that the government must closely monitor how the crisis affects consumer spending in the U.S.

Traders said the market is especially sensitive to the health of consumer spending ahead of Christmas in the U.S. But many investors already feel Japanese stocks are oversold with a lack of any real domestic pressures to pull them down.

The Nikkei 225 average rose 51.11 points, or 0.34 percent, to 14,888.77 in a choppy session. The index closed Wednesday at 14,837.66 -- its lowest point since July 24, 2006.

"There are not enough factors to justify a further drop in Japan shares," said Yasushi Hoshi, strategist at Daiwa Securities.

Trading houses were among the gainers, with Mitsui & Co. rising 3.2 percent to 2,405 yen and Sumitomo Corp. gaining 2.6 percent to 1,568 yen.

Katokichi Co. jumped 17 percent to 694 yen after Japan Tobacco Inc. and instant noodle maker Nissin Food Products Co. said Thursday they will jointly buy the frozen food producer in a deal exceeding 100 billion yen to create Japan's biggest frozen food maker.

But insurance shares took a tumble. Aioi Insurance Co. fell 11 percent to 544 yen. Mitsui Sumitomo Insurance Co. shed 7.3 percent to 1,118 yen.

In currency dealings, the dollar was trading at 109.00 yen at midafternoon, up from 108.68 yen late Wednesday in New York. It dropped at low as 108.25 yen in the New York session.

The euro in Asia rose to $1.4860 from $1.4848.

Financial markets in Japan will be closed Friday for the Labor Thanksgiving Day holiday. The markets will reopen on Nov. 26.