*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 1.6 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 surged 7.2 percent 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.
The U.S. Federal Reserve kept interest rates at nearly zero as widely expected on Wednesday, and gave no hint on an imminent exit from bold policy easing.
There were no major surprises from the Fed's policy meeting, said Nagayuki Yamagishi, strategist for Mitsubishi UFJ Securities. But the conclusion of the event removed an element of uncertainty, helping to spur some short-covering in Tokyo shares, Yamagishi said.
Investors had been keenly awaiting the Fed's policy statement, nervous about the risk that the Fed could hint at interest rate hikes.
The Nikkei rose 151.55 points to 9741.87, edging up above its 25-day moving average, which now lies right around 9,700.
The 25-day moving average is a closely watched technical level among Japanese equities traders, and had acted as support for the Nikkei over the course of its three-month rally since March.
But the Nikkei had fallen below the average earlier this week, turning it into a resistance level.
The broader Topix rose 1.5 percent to 916.34.
Mitsubishi Corp and other trading houses gained after prices of metals climbed overnight, with copper rising 3 percent after U.S. durable goods orders for May were better than expected, raising hopes the U.S. economy may be on the mend.
Mitsubishi Corp gained 4.1 percent to 1,811 yen and Mitsui & Co rose 4.0 percent to 1,159 yen.
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 5.8 percent to 147 yen and Shinsei Bank rose 7.6 percent to 156 yen.
Mitsubishi Electric Corp climbed to 610 yen and Tokyo Electron rose 4.1 percent to 4,570 yen.
Advancing shares outnumbered declining ones by more than 5 to 1. Trade lightened, with 1 billion shares changing hands on the Tokyo Exchange's first section compared to last week's morning average of 1.3 billion. (Additional reporting by Elaine Lies; Editing by Edwina Gibbs)