Nikkei likely to rise, but financials to weigh

TOKYO, April 24 (Reuters) - Japan's Nikkei stock average is
likely to rise on Friday, but financial shares may weigh on the
market after Mizuho Financial Group (8411.T) warned on Thursday
it would fall to an annual net loss of $5.9 billion.

Better-than-expected earnings for several U.S. regional banks
lifted Wall Street on Thursday, overshadowing disappointing
economic indicators and anaemic outlooks from some economic
bellwether firms, and positive sentiment is likely to carry over
into Asian trade, buoying the market.

"We're seeing a lot of U.S. earnings results coming in better
than expected, and that's giving rise to a sense of recovery --
although of course it's still far too soon to know if that
recovery is real or not," said Nagayuki Yamagishi, a strategist
at Mitsubishi UFJ Securities.

"Techs are likely to be strong, but there's still a lot of
concern about financial shares."

Investors nervous about the results of U.S. government
"stress tests" on the nation's 19 largest banks are likely to
stay to the sidelines amid a lack of overall market factors,
making trade thin and volatile.

On Friday, U.S. regulators begin discussing their findings
with the banks and U.S. officials will outline publicly the
process they followed. The results are due out on May 4.

The euro rallied broadly on Thursday after encouraging news
about the European economy and banking system raised hope that
the 16-nation euro zone may be emerging from the depths of
recession, and this may help keep exporters supported, market
analysts said. [USD/]

The benchmark Nikkei .N225 is likely to move between 8,650
and 9,000, though rising as far as 9,000 may be difficult. It
closed at 8,847.01 on Thursday.

In a sign that Japanese shares are likely to open higher,
Nikkei futures traded in Chicago 2NKc1 closed at 8,920 compared
with the Osaka close JNIc1 of 8,830.
----------------------MARKET SNAPSHOT @ 2249 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 851.92 0.99% 8.370
USD/JPY JPY= 97.92 -0.2% -0.200
10-YR US TSY YLD US10YT=RR 2.9304 -- 0.000
SPOT GOLD XAU= 903.95 0.22% 1.950
US CRUDE CLc1 49.74 0.24% 0.110
DOW JONES .DJI 7957.06 0.89% 70.49
-------------------------------------------------------------
> Banks, Apple drive Wall St higher, AmEx up late [.N]
> Euro rallies on manufacturing data, bank results [USD/]
> Narrow gains scored after two-day slide [US/]
> Gold climbs above $900 on fund buying, weak dollar [GOL/]
> Oil rises as dollar falls, stock market gains [O/R]
STOCKS TO WATCH

-- Japan Airlines 9205.T, All Nippon Airways (9202.T)

Japan Airlines and All Nippon Airways may eliminate fuel
surcharges on all international flights from July this year, the
Nikkei business daily said.

-- Mitsubishi Motors (7211.T)

Mitsubishi Motors is seen posting a group operating profit of
around 5 billion yen for the financial year ended on March 31,
the Nikkei said. [ID:WNAB7208]

-- NEC Electronics (6723.T)

NEC Electronics and Renesas Technology have reaced a basic
agreement to merge by next April, the Nikkei reported, a move
that would create the world's No. 3 chipmaker. [ID:nWNAB7468]

The deal would likely involve NEC Electronics absorbing
Renesas, but details have yet to be finalised, the Nikkei added.

-- Idemitsu Kosan Co (5019.T)

Idemitsu Kosan said on Thursday it plans to refine 2.30
million kilolitres (467,000 barrels per day) of crude oil in May,
down 16 percent from a year earlier, mainly due to scheduled
maintenance. [ID:nT223163]
(Reporting by Elaine Lies; Editing by Chris Gallagher)