Japan's Nikkei average gained 1.32 percent to close at a three-week closing high on Wednesday, buoyed by broad-based buying, but the market's main focus was on banks after a takeover battle for UFJ Holdings <8307.T> heated up. UFJ, the smallest and weakest of Japan's top four banks, jumped over 3 percent after Sumitomo Mitsui Financial Group Inc. <8316.T> proposed a 1-for-1 merger ratio to UFJ, or a $29 billion bid in value, challenging a rival offer by Mitsubishi Tokyo Financial Group <8306.T> to form the world's biggest bank. Both SMFG and MTFG shares ended lower. The Nikkei <.N225> rose 144.69 points to 11,130.02 -- the highest close since August 3 when it ended at 11,140.57. The broader TOPIX index <.TOPX> rose 1.10 percent to 1,128.92.///