UPDATE 1-Nikkei set to edge higher, exporters likely to lead

(Adds JAL, Advantest, Toyota to "stocks to watch")

TOKYO, Sept 8 (Reuters) - Japan's Nikkei stock average is
likely to edge higher on Tuesday, bolstered by gains in European
stocks, with a slight weakening of the yen boosting Canon Inc
7511.T and other exporters.

But trade is likely to remain thin in the wake of a U.S.
holiday on Monday and ahead of the settlement of Nikkei futures
and options on Friday, though analysts said activity was likely
to pick up as the week wears on.

"European share indexes all gained, Nikkei futures traded in
Singapore are up slightly, and the yen is slightly weaker against
the euro," said Nagayuki Yamagishi, a strategist at Mitsubishi
UFJ Securities.

"There's likely to be a swing back towards risk-taking."

European shares gained broadly, with the pan-European
FTSEurofirst 300 .FTEU3 rising 1.4 percent to 975.90 points as
financials, among others, boosted the index. [ID:nL7631026]

The euro edged up 0.1 percent against the yen to 133.32 yen
EURJPY=, while the dollar slipped 0.1 percent against the
Japanese currency to 93.02 yen. JPY=

Exporters are likely to gain as a result of the yen's retreat
against the euro, with attention on the movement of Chinese
shares.

The benchmark Nikkei .N225 is likely to move between 10,200
and 10,400. It closed at 10,320.94 on Monday after a day of
extremely thin trade, with turnover volume at its lowest since
mid-July.

In a sign the Nikkei may open higher, Nikkei futures traded
in Singapore <0#SSI:> edged up 0.5 percent from their Osaka close
JNIc1 of 10,310.
----------------------MARKET SNAPSHOT @ 2257 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1016.4 1.31% 13.160
USD/JPY JPY= 92.99 -0.03% -0.030
10-YR US TSY YLD US10YT=RR 3.4452 -- 0.000
SPOT GOLD XAU= 994.9 0.11% 1.050
US CRUDE CLc1 67.96 -0.09% -0.060
DOW JONES .DJI 9441.27 1.03% 96.66
-------------------------------------------------------------
> FTSE Jumps 1.7 pct; Cadbury bid boosts M&A hopes [.L]
> Dollar, yen down on G20 pledge; commodity FX jumps [USD/]
> Prices fall on supply worries, higher stocks [US/]
> Gold steady below $1,000; silver hits 13-mth high [GOL/]
> Oil hovers around $68; G20 lifts sentiment [O/R]
STOCKS TO WATCH

--Japan Airlines Corp 9205.T

Japan Airlines (JAL) may sell shares in its resort flight
operations, including in its unit Jalways Co, to travel agencies
or trade firms and use the funds to pay back its debt and buy new
airplanes, the Nikkei business daily said.

-- Advantest (6857.T)

Orders for Advantest's chip testers and other equipment in
July-September were better than expected and are likely to beat
the 11.6 billion yen logged in the previous quarter, the Nikkei
business daily said, citing an interview with Advantest President
Haruo Matsuno.

-- Toyota Motor Corp (7203.T)

Toyota will hire 800 temporary workers in October for
factories in Japan to meet growing demand for hybrid cars, public
broadcaster NHK reported.

-- Toho Co Ltd (9602.T)

Toho, Japan's largest movie company, said the country's
fading interest in Hollywood movies has cast a cloud over its
growth prospects and it was aiming to cut costs to offset
sluggish box office sales. [ID:nT58221]

-- Showa Shell Sekiyu KK (5002.T)

Oil refiner Showa Shell Sekiyu said it would invest $1.1
billion to build a new thin-film solar cell plant, as it chases
First Solar (FSLR.O) in a growing market. [ID:T51322]

-- Asics Corp (7936.T), Snow Brand Milk Products 2262.T

Sporting goods maker Asics will be added to the Nikkei 300 on
Sept. 25, the Nikkei Inc said on Monday. [ID:nT34680]

It will replace Snow Brand Milk Products, which will be
delisted in connection with forming a joint holding company.

-- Hitachi Software Engineering 9694.T

Hitachi Software Engineering will be delisted from the Nikkei
300 on Oct. 2, the Nikkei Inc said on Monday, two months after
Hitachi Ltd (6501.T) said it would launch a tender offer for
Hitachi Software Engineering to bring it fully under its control.
(Reporting by Elaine Lies; Editing by Chris Gallagher)