UPDATE 2-Japan's JFE Steel to upgrade idle furnace

* JFE to spend 30 bln yen for upgrade

* Capacity to expand 16 percent

TOKYO, June 23 (Reuters) - Japan's JFE Steel Corp, a unit of JFE Holdings (5411.T), will spend about 30 billion yen ($312.8 million) to upgrade an idled blast furnace in Kurashiki, western Japan.

JFE Steel said on Monday the upgrade will boost the capacity of the No.3 furnace at Kurashiki in Okayama Prefecture by 16 percent from the current level by April.

The steelmaker will decide when to resume operating the furnace, which has been idled since January amid weak demand, after assessing the outlook for demand.

The furnace was last renovated 19 years ago.

The company also has idled the No.3 furnace at its plant in Fukuyama, Hiroshima prefecture, but has not scheduled the reopening of that furnace. ($1=95.91 Yen) (Reporting by Yumiko Nishitani)