Nikkei to rise, US jobs data boosts recovery hopes

TOKYO, Aug 10 (Reuters) - Japan's Nikkei stock average may
test a 10-month high on Monday, with good U.S. jobs data
underpinning hopes for a recovery in the world's largest economy
and boosting exporters such as Sony Corp (6758.T).

Investors may focus on Mitsubishi Chemical Holdings Corp
(4188.T) and Mitsubishi Rayon Co Ltd 3404.T after the Nikkei
financial daily said Mitsubishi Chemical planned to acquire
acrylic fibre maker Mitsubishi Rayon through a tender offer.

The U.S. unemployment rate fell in July for the first time in
15 months as employers cut fewer than expected jobs, sending U.S.
stocks higher on Friday and pushing the Standard & Poor's 500 to
a 10-month high. [ID:nN07385157]

The dollar jumped more than 2 percent against the yen to its
best level since June, and fetched around 97.56 yen in early
trade. JPY=

"There's a lot of positive factors out there, and the market
will respond well to these," said Hiroichi Nishi, general manager
at the equity division of Nikko Cordial Securities.

"In particular, the yen's weakening has now taken it below
the level that many manufacturers have set as their exchange
rate, boosting hopes that earnings will be even better."

Investors fret about a stronger yen because it eats into
exporter earnings when repatriated.

Analysts said the benchmark Nikkei .N225 is set to move
between 10,450 and 10,650. It marked a 10-month closing high of
10,412.09 on Friday and last Tuesday hit a 10-month intraday high
of 10,479,19.

Once the Nikkei breaks the psychologically significant 10,500
level, the next target will be 10,800 -- a level it last saw in
October and a 50 percent Fibonacci retracement from its June 2008
high and last October's 26-year low just under 7,000.

In a sign that stocks are set to open higher, Nikkei futures
traded in Chicago 2NKc1 closed at 10,635 points, up 2.1 percent
from the Osaka close of 10,420 JNIc1.
----------------------MARKET SNAPSHOT @ 2257 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1010.48 1.34% 13.400
USD/JPY JPY= 97.52 -0.15% -0.150
10-YR US TSY YLD US10YT=RR 3.8562 -- 0.000
SPOT GOLD XAU= 953.85 0.01% 0.050
US CRUDE CLc1 70.42 -0.72% -0.510
DOW JONES .DJI 9370.07 1.23% 113.81
-------------------------------------------------------------
> July jobs data lifts stock indexes more than 1 pct [.N]
> Dollar rises on better-than-expected U.S. jobs data [USD/]
> Retreat as fewer US job losses hurt safety bid [US/]
> Gold drops as dollar rallies on US jobs data [GOL/]
> Oil slips as U.S. jobs data boosts dollar [O/R]
STOCKS TO WATCH

-- Toyota Motor Corp (7203.T)

Toyota plans to raise its global output target for the year
to March 2010 by 3 percent to 6.5 million units, the Yomiuri
newspaper said, in the latest sign of nascent recovery in auto
demand. [ID:nT218061]

-- Bridgestone (5108.T)

Top Japanese tyre maker Bridgestone tumbled to an operating
loss in the second quarter, hit by the economic slump and a
stronger yen, but it raised its full-year outlook again after a
surprise upgrade in June. [ID:nT276182]

-- Usen Corp 4842.OJ

Usen, a media content provider, is in talks with MBK Partners
and other funds on boosting its capital, two people with direct
knowledge of the deal said. [ID:nT171861]

-- NTT DoCoMo Inc (9437.T)

Japan's top wireless operator NTT DoCoMo is interested in
buying Luxembourg-based telecom operator Millicom's MICC.O
Cambodian network to boost its presence in Southeast Asia, an
executive said. [ID:nT179179]

-- Rohm (6963.T)

Japanese specialty chip maker Rohm revised up its guidance
for the six months to September to a net loss of 2.5 billion yen
from a previous forecast for a loss of 7.5 billion yen on cost
cuts and better-than-expected demand for flat TVs.
(Reporting by Elaine Lies; Editing by Hugh Lawson)