* Tokyo stocks up 3 pct, set to close Tues gap
* Yen broadly weaker after last week's intervention
* JGB futures down 0.28 point; focus on emergency spending
By Hideyuki Sano and Antoni Slodkowski
TOKYO, March 22 (Reuters) - Japanese shares rose more than 3 percent on Tuesday while government bond futures slipped as reports of progress to contain radiation leaks at the quake-hit nuclear plant and the yen's decline prompted investors to buy back risky assets.
The yen was broadly softer after leading central banks intervened on Friday for the first time since 2000, using an estimated $25 billion to stem export-damaging strength in the Japanese currency.
Technicians working at the stricken nuclear plant on Japan's Pacific coast have managed to attach power cables to all six reactors and started a pump at one of them to cool overheating nuclear fuel rods.
This encouraged investors to buy back domestic stocks, especially after shares fell 10 percent last week.
"Investors are buying blue-chip exporters, which were sold off in panic on (last) Monday and Tuesday and now are gaining on short-covering," said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.
"This earthquake is difficult to compare with the one that struck in Kobe in 1995, also in terms of impact on firms, because it was followed by a tsunami, which makes assessment of the damage sustained much harder," he said, pointing to a further downside risk in the benchmark Nikkei average.
The Nikkei rose nearly 4 percent at one point on Tuesday before trimming losses to stand up 3 percent at 9,487.52. It briefly rose above the key 9,500 level where portfolio managers and traders were expected to sell to cut losses.
Levels around 9,565 represent a 61.8 percent retracement of last week's selloff. Beyond that, the March 14 low of 9,578 should prove the next resistance.
Most actively traded shares included Mitsubishi Paper , Taiheiyo Cement and electronic giant NEC .
"The best-performing sectors since the earthquake have been construction and mining. This reflects market expectations of demand for reconstruction and fossil fuels," Barclays Capital said in a note to clients.
Nikkei futures traded in Chicago were up 3.2 percent at 9,540, while futures in Osaka also rose 3.4 percent to 9,440.
The broader TOPIX index rose 3.5 percent to 858.93.
Early last week Japanese shares suffered their worst two-day decline since October 1987.
The U.S.-listed shares of Japanese companies rose more than 2.1 percent on Monday.
The yen was down around 0.2 percent at 81.26 per dollar , having hit a record high of 76.25 yen last week. The dollar rose as high 82.00 yen after Friday's G7 intervention.
Traders reported offers to sell dollars lined up from 82 yen up to 83.50.
Benchmark Japanese government 10-year bond futures fell 0.29 point to 139.44.
Investors are concerned that the cost of Japan's triple disaster of earthquake, tsunami and nuclear emergency could be as much as $200 billion, exceeding that of the 1995 Kobe earthquake.
A senior ruling party lawmaker was quoted as saying on Monday that large supplementary budgets are needed by June to help with reconstruction.
(Additional reporting by Naomi Tajitsu; Writing by Natsuko Waki;; Editing by Michael Watson)