Nikkei set to rise on growing economic hopes

TOKYO, July 24 (Reuters) - Japan's Nikkei average is expected
to climb on Friday, buoyed by growing optimism about a U.S.
economic recovery after strong corporate earnings and rebounding
home sales sent the Dow to its highest since January.
Electronics makers Sharp Corp (6753.T) and Sony Corp (6758.T)
may be in focus after the Nikkei business daily said they will
likely finalise a deal by the end of this month to form a
television LCD panel joint venture. [ID:nBNG541429]

Strong profits from U.S. bellwethers such as manufacturer 3M
& Co (MMM.N) and telecoms firm AT&T Inc (T.N) provided further
evidence that second-quarter earnings were more upbeat than
initially thought, sending the Dow industrials above the key
9,000 mark.

U.S. existing home sales rose in June, gaining for three
months in a row for the first time since 2004.
"While there is a little concern about overheating, the
reality is that brightness is spreading in the economy," said
Hiroichi Nishi, general manager at the equity division of Nikko
Cordial Securities.

Market analysts said the Nikkei was likely to try for the
psychologically important 10,000 level, last hit on July 1. This
week has been marked by late-afternoon buying by hedge funds,
which could emerge on Friday as well, said Masayoshi Yano, a
senior market analyst at Meiwa Securities.

Analysts said the Nikkei is likely to move from 9,800 to
10,050. It closed at 9,792.94 on Thursday in its seventh straight
day of gains, a winning streak unseen for seven months.

In a sign stocks will rise, Nikkei futures traded in Chicago
2NKc1 closed at 10,010, up 2.3 percent from the Osaka close
JNIc1.
----------------------MARKET SNAPSHOT @ 2241 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 976.29 2.33% 22.220
USD/JPY JPY= 95.15 0.14% 0.130
10-YR US TSY YLD US10YT=RR 3.6653 -- 0.000
SPOT GOLD XAU= 947.5 0.04% 0.350
US CRUDE CLc1 66.7 -0.68% -0.460
DOW JONES .DJI 9069.29 2.12% 188.03
-------------------------------------------------------------
> Rally lifts dow above 9,000, but Microsoft sinks late [.N]
> Dollar, euro advance vs yen on recovery optimism [USD/]
> Bonds sink on Fed comments, stocks, supply [US/]
> Gold rises on economic optimism, U.S. silver ETF [GOL/]
> Oil hits three-week high as Wall Street rallies [O/R]
STOCKS TO WATCH

-- Toyota Motor Corp (7203.T)

Toyota will start talks to pull out of a California-based
joint venture with General Motors GM.UL, a Toyota executive
said on Thursday.

A Toyota official relayed to Reuters the remarks by the
executive, who requested anonymity. [ID:nT291935]

-- KDDI Corp (9433.T)

Mobile phone operator KDDI Corp sees group operating profit
rising 6 percent to 40 billion yen ($420.9 million), leaving its
previous forecast unchanged.

-- Chugai Pharmaceutical Co Ltd (4519.T)

The drugmaker said operating profit for the six months ended
in June jumped 61 percent to 37.2 billion yen, buoyed by sales of
its influenza drug Tamiflu. The company kept its full-year
forecast for a 63 billion yen operating profit, up 22 percent
from the previous year.

-- Nippon Steel Corp (5401.T), JFE Holdings Inc (5411.T)

Nippon Steel and JFE will both report recurring losses of
about 60 billion yen for the April-June quarter, hit by weak
demand and high raw material procurement costs, the Nikkei
business daily reported on Friday.

Nippon Steel and JFE's earnings will likely improve in the
July-September quarter thanks to falling raw materials prices and
a pickup in demand from the electrical machinery and auto
sectors, the Nikkei said.

-- SSP Pharmaceutical 4537.T

The drugmaker said operating profit for the six months ended
in June was likely 1.78 billion yen, up 98 percent from its own
earlier estimate, buoyed by strong sales of laxative drugs and
cost cutting.

-- Suzuki Motor Corp (7269.T)

Maruti Suzuki (MRTI.BO), India's top carmaker, reported an
unexpected 25 percent rise in quarterly net profit as it rode on
higher sales, new product launches and a drop in raw material
prices. Japan's Suzuki Motor Corp (7269.T) holds a 54.2 percent
stake in Maruti. [ID:nBMA003418]

-- Tokyo Electron 8035., other chip-linked companies

The book-to-bill ratio for Japan's chip equipment makers was
1.27 in June, up from 0.66 the previous month, as orders outpaced
sales for the first time since August 2008. [ID:nTKU105466]

-- Fast Retailing Co Ltd (9983.T)

Fast Retailing, operating of the Uniqlo casual clothing
brand, is set to open branches in major department stores
starting this autumn, the Nikkei business daily said.
($1=95.03 Yen)
(Reporting by Elaine Lies; Editing by Michael Watson)