TOKYO, March 14 (Reuters) - Japanese stocks rose more than 2 percent on Monday to a more than a 1-week high as investors shook off initial scepticism over the European Central Bank's latest stimulus package and on hopes that oil prices may be bottoming out.
The Nikkei share average rose 2.1 percent to 17,290.03 by late morning, its highest since Feb. 3.
But while market players said appetite for riskier assets was improving, many investors remained cautious ahead of central bank meetings this week.
The Bank of Japan's two-day policy meeting will conclude on Tuesday while the U.S. Federal Reserve FOMC will meet on Wednesday.
"The ECB decision is seen as very positive now that markets have digested what it all means, but conviction perhaps isn't as strong as it should be as investors exercise a bit of caution," said Stefan Worrall, director of Japan equity sales at Credit Suisse.
"I don't think investors are expecting anything drastic from the BOJ, especially given the fact that they are meeting before the FOMC and will be reticent about making a big aggressive gamble ahead of a Fed meeting."
Oil prices were stable in early trading, adding to hopes the market may be bottoming, which helped risk appetite and global sentiment.
The Topix subindex for banks climbed 3.3 percent, building on last week's gains amid evaporating expectations that the Bank of Japan would deepen its negative rates policy.
The rally was led by Japan's regional banks, which saw share prices tumble immediately after the BOJ adopted negative rates in late January.
Yamagata Bank Ltd shares soared 5.1 percent while Fukui Bank Ltd climbed 5.2 percent.
The yen remained relatively weak against the dollar, boosting the profit outlook for Japan's exporters.
Shares of Panasonic Corp and Sony Corp each jumped 3 percent, while Bridgestone Corp gained 1.3 percent and Toyota Motor Corp rose 1.6 percent.
The broader Topix climbed 1.8 percent to 1,383.97 with each of its 33 subindexes in positive territory during midmorning trade.
The JPX-Nikkei Index 400 rose 1.8 percent to 12,517.77. (Reporting by Joshua Hunt; Editing by Kim Coghill)