* Nikkei posts biggest percentage gain in almost 3 weeks
* BOJ cuts rates, eyes asset buying in surprise move
* Market focus moves to U.S. jobs data, Fed's possible easing
By Chikafumi Hodo
TOKYO, Oct 5 (Reuters) - Japan's Nikkei jumped 1.5 percent on Tuesday, its biggest rise in almost three weeks, after the Bank of Japan effectively cut interest rates to zero, weakening the yen and pushing up shares of exporters like Sony Corp.
The central bank also decided to set up a fund to buy assets ranging from government bonds and short-term government securities to commercial paper and corporate bonds, steps that analysts said would support the market although the long-term impact may be limited.
"The BOJ's action was surprising as the central bank lowered interest rates to zero and expanded the type of assets it will buy, especially assets such as exchange-traded funds (ETFs) and REITs," said Takeshi Osawa, senior fund manager at Norinchukin Zenkyoren Asset Management.
"This should prevent share prices from falling sharply from here. The Nikkei should be supported but it is still premature to say that its underlying bearish trend has reversed completely," he said.
The benchmark Nikkei rose 137.70 points to 9,518.76 and booked its biggest daily percentage gain since Sept. 15 -- when the BOJ intervened in the currency market for the first time in more than six years.
The broader Topix rose 9.90 points, or 1.2 percent, to 832.64.
But further advances for the Nikkei were blocked by a series of technical resistance levels, including the upper level of the Nikkei's daily Ichimoku cloud around 9,530, as the dollar's recovery against the yen was limited.
The dollar was up 0.3 percent at 83.63 yen but off its session high of 83.99 yen reached just after the BOJ's policy announcement. That was still not far from the 15-year low of 82.87 yen set just before Japan intervened in the currency market on Sept. 15.
The market focus will shift to U.S. payroll data on Friday and the Group of Seven nations meeting later in the week to determine the outlook for the yen.
"It's good that the BOJ eased before the Fed took easing steps. It will make it easier for Japan to make a case for intervention," said Minori Uchida, senior analyst at the Bank of Tokyo-Mitsubishi UFJ.
"But it's probably too much to expect today's steps to fully offset the possible impact of the Fed's eventual quantitative easing. Because Japan's monetary policy has been loose for years, any additional move tends to have a limited impact," Uchida said.
KDDI JUMPS, MIZUHO REBOUNDS
Shares of exporters advanced as the dollar edged up after the BOJ's policy announcement, with Sony Corp climbing 1.4 percent to 2,600 yen and Kyocera Corp rising 2.8 percent to 8,340 yen.
Konica Minolta rose 3.7 percent to 861 yen after CEO Masatoshi Matsuzaki told Reuters that the company aims to double operating profit from current levels to more than 100 billion yen ($1.2 billion) in the year to March 2014.
KDDI Corp rose 5.4 percent to 410,000 yen after the nation's No. 2 cellphone operator announced it will launch Japan's first smartphone to feature an electronic money function.
The IS 03 phone, to be launched at the end of November, will be manufactured by Sharp Corp, and use Google Inc's Android system.
Mizuho Financial Group rose 3.6 percent to 116 yen, rebounding after revisiting a seven-year low of 110 yen hit on Monday on worries that Japanese banks may be forced to raise fresh capital.
Mizuho and other Japanese banks tumbled on Monday after Switzerland tightened the reins on UBS and Credit Suisse, telling them to hold more capital beyond the "Basel III" international standards set three weeks ago. (Additional reporting by Aiko Hayashi; the Tokyo newsroom; Editing by Chris Gallagher)