Nikkei set to rise, focus on Japan election, China

TOKYO, Aug 28 (Reuters) - The Nikkei average is expected to
rise on Friday after the previous day's decline, with investors
encouraged by a strong run-up in U.S. stocks, while Japan's Aug.
30 election and moves in Chinese stocks remain in focus.

Analysts say investors have factored in a big win by Japan's
opposition Democratic Party in the election and the focus is now
shifting to post-election events, including who will be the next
finance and economy ministers. [ID:POLJP]

Toyota Motor Corp (7203.T) may draw attention after industry
sources said on Thursday it has decided to end production at a
California plant it has shared with General Motors for 25 years.
The United Auto Workers union called the decision "devastating
news for thousands of workers". [ID:nN27329696] [ID:nWEN2897]

"A change of government in Japan is finally getting closer to
becoming a reality and the market could have a strong finish if
investors start to expect gains following the results of the
election," said Kazuhiro Takahashi, general manager at Daiwa
Securities SMBC.

"Chinese stocks will likely be in focus during the day after
worries that China would curb industrial overcapacity hurt the
market yesterday."

Nikkei futures traded in Chicago 2NKc1 closed at 10,570 on
Thursday, up 0.6 percent from the Osaka close JNIc1.

Market participants expect the benchmark Nikkei .N225 to
move between 10,400 and 10,600 on Friday.

The benchmark fell 1.6 percent the previous day to end at
10,473.97. Market players said news from China helped curb
investor confidence after the country's state council said on
Wednesday it would restrict licences for steel and cement
production to clamp down on overcapacity. [ID:nPEK160728]

The Dow industrials posted an eighth straight day of gains on
Thursday led by Boeing Co (BA.N). The U.S. aircraft manufacturer
said its long-delayed 787 Dreamliner would make its first flight
by the end of the year. [.N] [ID:nN27309257]
----------------------MARKET SNAPSHOT @ 2257 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1030.98 0.28% 2.860
USD/JPY JPY= 93.58 0.12% 0.110
10-YR US TSY YLD US10YT=RR 3.4643 -- 0.000
SPOT GOLD XAU= 948.9 0.23% 2.150
US CRUDE CLc1 72.67 0.25% 0.130
DOW JONES .DJI 9580.63 0.39% 37.11
-------------------------------------------------------------
> Wall St gains on oil rebound; Boeing, financials up [.N]
> Dollar hits multiweek lows vs yen, euro [USD/]
> Improving stocks outshine solid bond auction [US/]
> Gold rises on dollar weakness, economic optimism [GOL/]
> Oil bounces back above $72 as Wall Street reverses [O/R]

STOCKS TO WATCH

-- GS Yuasa Corp (6674.T), Nippon Mining Holdings 5016.T

GS Yuasa and Nippon Mining & Metals, a unit of Nippon Mining
Holdings, each plan to start collecting lithium ion batteries
from scrapped electric and hybrid vehicles to recycle lithium,
the Nikkei business daily reported on Friday.

-- Takeda Pharmaceutical (4502.T)

Moody's changed Aa1 rating outlook for Takeda Pharmaceutical,
Japan's largest drugmaker, to negative. The credit rating agency
said Takeda's top-line growth and earnings may be pressured by a
series of U.S. patent expirations for core products. [ID:nWLA2036]

-- Murata Manufacturing Co (6981.OS)

Electronics parts maker Murata said on Thursday it will pay
664 million yen ($7.1 million) to buy 1 million shares in Tokyo
Denpa Co (6900.T), a maker of quartz oscillators and filters.
[ID:nTFA006429]

-- Toyo Tire & Rubber Co (5105.T)

Toyo Tire & Rubber said on Thursday it will invest 10 billion
yen to build a tyre factory in China.

The new plant will produce tyres for passenger cars and light
trucks. The annual output will be 2 million tyres.
(Reporting by Aiko Hayashi; Editing by Michael Watson)