*Nikkei hovers near 25-day moving average
*Aozora Bank and Shinsei Bank climb on merger talks
*Mitsubishi Electric jumps on report of solar plans
By Masayuki Kitano
TOKYO, June 25 (Reuters) - Japan's Nikkei stock average rose 1.3 percent on Thursday, with Aozora Bank and Shinsei Bank rallying on news that they were in merger talks and tech shares tracking their U.S. peers higher.
Mitsubishi Electric Corp climbed 6.5 percent to 606 yen after the Nikkei business daily said the company plans to build plants in the United States and Europe to assemble solar power generation systems using solar panels shipped from Japan.
Shares such as Tokyo Electron rose after their U.S. tech peers drew strength in the wake of stronger-than-expected quarterly results from software maker Oracle Corp.
A Federal Reserve meeting finished offering no surprises but removed a element of uncertainty that was likely helping to spur some short-covering in the Nikkei, which had slid 2.8 percent two days ago, said Nagayuki Yamagishi, strategist for Mitsubishi UFJ Securities. Investors had been keenly awaiting the Fed's policy statement, and had been nervous about the risk that the Fed could hint at interest rate hikes.
The Nikkei rose 123.11 points to 9,713.43, hovering right around its 25-day moving average.
The Nikkei had fallen below the 25-day average earlier this week and it is now regarded as a resistance level.
The broader Topix rose 1.1 percent to 912.00.
The Federal Reserve on Wednesday kept interest rates at nearly zero, and gave no hint on an imminent exit from bold policy easing.
The Fed also stuck to its huge programme of buying government and mortgage debt and said it saw signs that the deep U.S. recession was easing.
Aozora Bank and Shinsei Bank, hurt by soured investments and exposure to subprime loans, said on Thursday they are in talks to merge, in a deal that would create Japan's sixth-largest bank.
It was the first time the two money-losing lenders have confirmed the talks, after sources told Reuters last month that the banks were discussing a merger.
Aozora Bank climbed 5.0 percent to 146 yen and Shinsei Bank rose 6.9 percent to 155 yen.
Tokyo Electron rose 4.3 percent to 4,580 yen. (Reporting by Masayuki Kitano; Editing by Edwina Gibbs)