* Toshiba jumps after announcing plan to sell overseas energy businesses, buyback its own shares
* Suruga Bank soars after market prices in bad news - trader
By Ayai Tomisawa
TOKYO, Nov 8 (Reuters) - Japan's Nikkei surged on Thursday, tracking a rally in Wall Street after U.S. midterm elections produced no major surprises, while Toshiba was in the spotlight after it announced cost cuts and a major share buyback.
The Nikkei share average ended 1.8 percent higher at a 2-1/2-week closing high of 22,486.92 points.
The outcome of the U.S. midterm election matched market expectations, producing a split Congress with Democrats winning control of the House of Representatives and Republicans cementing their majority in the Senate.
Analysts said investors were buying back stocks on optimism that U.S. President Donald Trump's planned measures to boost business growth would continue.
"Hopes of further fiscal stimulus also faded (under the possibility that Republicans would win both houses) which could have fuelled inflation," said Yoshinori Shigemi, a global market strategist at JPMorgan Asset Management.
"Those who were cautious before the election and waited to buy are now buying."
He said the market was now focusing on a U.S. Federal Reserve rate decision later in the global day. The Fed is expected to keep rates on hold but raise them again in December, with more to come next year.
All but one of the Topix's 33 subsectors were in positive territory. The broader Topix rose 1.7 percent to 1,681.25. Advancing issues outnumbered declining ones 1,733 to 324.
Toshiba Corp jumped 13 percent to a near two-year high and posted the biggest daily gain since July 2017 after the company said it is liquidating its British nuclear power unit and selling its U.S. liquefied natural gas (LNG) business.
The company announced a plan to repurchase up to 40 percent of its own shares.
"There had been reports about a possibility of selling non-performing business and job cuts so such moves had been expected at some point. But investors are taking heart," said Hiroyuki Fukunaga, chief executive of Investrust, a financial advice firm.
"The share buyback announcement worth up to 40 percent of outstanding shares is definitely positive, too."
Suruga Bank jumped 16 percent after Reuters reported that the bank is expected to post a net loss of around 50 billion yen ($440.02 million)for the first half, compared to a net profit of initially-expected 12 billion yen, citing a person with direct knowledge.
Traders said that retail investors, who had sold the stock when they first speculated that the bank would post a loss, were covering their short positions after they got an indication about the size of the loss. (Editing by Shri Navaratnam)