Nikkei seen rising, weaker yen to help exporters

TOKYO (Reuters) - Japan's Nikkei stock average is likely to rise on Thursday and may test a nine-month high, with exporters expected to benefit from a weaker yen, although the market will also take its cues from output data due before the open.

Honda Motor Co (7267.T) and Nissan Motor Co (7201.T) are likely to be in focus after they surprised markets on Tuesday by eking out small profits last quarter, helped by cost cuts.

Wall Street fell on worries that China might be ready to hit the brakes on lending, a move that could curb demand and hinder a global economic recovery, with commodity prices and shares in the energy and raw materials sectors hit hard.

A steep drop in U.S. durable goods orders also fueled the fall in stocks.

But Tokyo market analysts said these factors had been used as excuses to take profits on U.S. stocks after recent sharp rises.

"There's a little concern about possible overheating in the Nikkei, but futures in Chicago rose and the yen's a bit weaker, which should help," said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.

"But rises will be limited as investors shift to the sidelines as the end of the month nears."

Analysts polled by Reuters predict a rise of 2.4 percent in industrial output for June, following a 5.7 percent rise in May.

Investors are also likely to want to wait and see the results of earnings for key Japanese companies as the earnings season peaks on Thursday and Friday. Among firms due to announce later on Thursday are Sony Corp (6758.T) and Fujitsu Ltd (6702.T).

The benchmark Nikkei .N225 is likely to trade between 10,000 and 10,200, analysts said.

It closed at 10,113.24 on Wednesday. If it rises above 10,179.59, the year's high touched on Monday, it will hit levels unseen since last October.

Nikkei futures traded in Chicago rose 0.7 percent from the Osaka close of 10,110.

STOCKS TO WATCH

-- Nomura Holdings Inc (8604.T),

Nomura, Japan's largest brokerage, posted its first profit in six quarters as it cashed in on a market rebound and began to leverage on its acquisition of parts of Lehman Brothers.

-- Sumitomo Corp (8053.T)

Sumitomo Corp plans to invest about 100 billion yen over the next decade to develop real estate in Tokyo's Kanda district, which has a major train station, the Nikkei business daily reported on Thursday.

The trading house plans to build high-rise office towers and other buildings at six to 10 sites, the Nikkei said.

-- Toshiba Corp (6502.T)

Toshiba, Japan's biggest chipmaker, expects its chip operations to turn profitable in July-September on cost cuts, but warned of a possible year-end dip on fears of increased spending by rivals.

-- Sompo Japan Insurance 8755.T, Nippon Koa Insurance 8754.T

Sompo Japan will take over smaller rival Nipponkoa Insurance in a share swap valued at $4.7 billion, according to terms of the planned deal announced on Wednesday.

-- Nippon Yusen KK (9101.T)

Nippon Yusen is expected to sign a 20-year contract with Brazilian natural resources giant Vale SA (VALE5.SA) to transport 1.3 million tonnes of iron ore a year from Brazil to China from 2012, the Nikkei business daily said on Thursday.

Nippon Yusen will order a new 300,000-tonne carrier to handle the contract, the Nikkei said.

-- Yahoo Japan Corp (4689.T), Softbank Corp (9984.T)

Microsoft Corp (MSFT.O) and Yahoo Inc (YHOO.O) have launched a 10-year Web search deal to challenge market leader Google but stopped short of combining other advertising businesses or suggesting any deeper ties.

Yahoo Japan is owned just a little under 41 percent by Softbank and 35 percent by Yahoo Inc.

-- Japan Petroleum Exploration Co (Japex) (1662.T)

Japan Petroleum Exploration Co has entered into negotiations with Iraqi authorities to develop a giant oil field in the Middle Eastern country, the Nikkei business daily said.

-- Fujifilm Holdings Corp (4901.T)

Fujifilm, a top photofilm manufacturer, is seen swinging to a 2 billion yen pretax profit in the April-June quarter, though sales are seen down 24 percent for the same period, the Nikkei business daily said.

(Reporting by Elaine Lies; Editing by Edwina Gibbs)