Nikkei seen higher on Wall St gain, economy optimism

TOKYO, Aug 14 (Reuters) - Japan's Nikkei average is likely to
rise on Friday after U.S. stocks gained, with
better-than-expected earnings by Wal-Mart Stores Inc (WMT.N)
helping offset disappointing data on retail sales and jobs.

Isetan Mitsukoshi Holdings Ltd (3099.T) may be in focus after
the Nikkei business daily said the company plans to open five
large department stores in China by 2014, doubling its store
network there to 10.

Nikkei futures traded in Chicago 2NKc1 rose 0.6 percent
from the Osaka close of 10,520 JNIc1 on Thursday, pointing to a
higher start.

"The general trend in which the economy is on a recovery
track hasn't changed," said Kazuhiro Takahashi, general manager
at Daiwa Securities SMBC.

"The market simply reaffirmed the fact that consumer spending
or employment haven't really caught up with the recovery momentum
yet."

The Standard & Poor's 500 Index .SPX gained 0.7 percent on
Thursday after Wal-Mart posted better-than-expected quarterly
earnings as a clampdown on inventory offset falling sales, and it
forecast a full-year profit that could beat Wall Street
estimates. [ID:nN13399911]

The market shrugged off the U.S. Commerce Department report
that retail sales fell 0.1 percent in July, defying market
expectations of a gain.

Other data showed the number of workers filing initial
applications for unemployment benefits rose by 4,000 to a
seasonally adjusted 558,000. Economists had anticipated a drop.
[ID:nN13227479]

Market participants expect the benchmark Nikkei .N225 to
trade between 10,450 and 10,600 on Friday. It rose 0.8 percent
the previous day, edging back towards a 10-month high of
10,587.36 hit on Tuesday.
----------------------MARKET SNAPSHOT @ 2306 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1012.73 0.69% 6.920
USD/JPY JPY= 95.38 0.01% 0.010
10-YR US TSY YLD US10YT=RR 3.6043 -- 0.000
SPOT GOLD XAU= 955.45 0.20% 1.950
US CRUDE CLc1 71.07 0.78% 0.560
DOW JONES .DJI 9398.19 0.39% 36.58
-------------------------------------------------------------
> Wall Street rises as Wal-Mart offsets weak data [.N]
> Euro rises as France, Germany exit recession [USD/]
> Rally on solid 30-yr auction, weak retail sales [US/]
> Gold rises on economic optimism, investment interest [GOL/]
> Oil rises tracking Wall Street [O/R]
STOCKS TO WATCH

-- Nintendo (7974.OS), Sony (6758.T)

U.S. video game equipment and software sales fell 29 percent
in July to $848.9 million, research group NPD said on Thursday,
as the gaming industry limps through the economic downturn.

Nintendo's Wii was again the top-selling home console in
July, though sales fell from last year. Microsoft's (MSFT.O) Xbox
360 was No. 2.

Sony's PlayStation 3 was in third place, followed by the
PlayStation 2. [ID:nN13269835]

-- Shipping firms like Nippon Yusen (9101.T), Mitsui O.S.K.
Lines (9104.T)

Shipping firms such as Nippon Yusen and Mitsui O.S.K. Lines
will likely be in focus after the Baltic Dry Index .BADI, the
global freight index of prices for shipping commodities, climbed
2.8 percent on Thursday.
(Reporting by Aiko Hayashi; Editing by Chris Gallagher)