Nikkei set to rise on econ hope, eyes on new govt

TOKYO, Sept 16 (Reuters) - Tokyo's Nikkei average is likely
to start higher on Wednesday after retail sales data helped lift
U.S. stocks to highs for the year, but gains may be limited as
investors carefully monitor policies of Japan's incoming
government.

Yukio Hatoyama will take office as prime minister and is
expected to announce his cabinet lineup on Wednesday after a huge
election win on Aug. 30. [ID:nPOLJP]

"The global economy is on track for a recovery as underscored
by comments by (Federal Reserve Chairman Ben) Bernanke that the
recession was probably at an end, and the market will likely
start higher," said Hiroichi Nishi, general manager of equity
marketing at Nikko Cordial Securities.

Bernanke, speaking on the one-year anniversary of the
collapse of Lehman Brothers LEHMQ.PK, said the recession "is
very likely over." [ID:nLEHMAN]

Nikkei futures traded in Chicago 2NKc1 closed at 10,315 on
Tuesday, up 1.2 percent from the Osaka close JNIc1, pointing to
a higher start.

"But trade will then probably be mixed as investors really
want to see the policies of the new government, while the yen is
still stronger against the dollar than many manufacturers had
expected when they issued their earnings forecasts," said Nishi.

Market participants expect the benchmark Nikkei .N225 to
move between 10,150 to 10,350 on Wednesday. It edged up 0.2
percent the previous day to end at 10,217.62.

U.S. stocks rose on Tuesday to 2009 highs as improvement in
retail sales in August reassured investors about a rebound in
U.S. economic demand. A rise in the government's Producer Price
Index signaled increased consumption of raw materials. [.N]
[ID:nN15548319]
----------------------MARKET SNAPSHOT @ 2302 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1052.63 0.31% 3.290
USD/JPY JPY= 90.98 -0.05% -0.050
10-YR US TSY YLD US10YT=RR 3.4467 -- 0.000
SPOT GOLD XAU= 1007.5 0.16% 1.600
US CRUDE CLc1 70.3 -0.89% -0.630
DOW JONES .DJI 9683.41 0.59% 56.61
-------------------------------------------------------------
> Market hits 2009 highs, led by materials [.N]
> Dollar falls to near one-year low vs basket [USD/]
> Retail sales sizzle leaves bonds glum [US/]
> Gold turns higher as dollar gives up gains [GOL/]
> Oil jumps 3 pct as U.S. data lifts economic outlook [O/R]
STOCKS TO WATCH

-- Japan Airlines Corp 9205.T

Japan Airlines is likely to opt for a tie-up with Delta Air
Lines Inc (DAL.N) or AMR Corp's AMR.N American Airlines, among
rivals seeking to invest in the loss-making carrier, if Japan and
the United States can reach an "open skies" agreement.

As it looks to cut operating costs 30 percent, CEO Haruka
Nishimatsu said JAL faced its "largest-ever downsizing" through
2011, with plans to cut 6,800 jobs, or 13 percent of its staff.
[ID:nT194467]

Separately, the International Air Transport Association
raised its forecast for 2009 industry losses by $2 billion to $11
billion as weak passenger and cargo traffic hits revenue.
[ID:nWBT013153]

-- kabu.com Securities Co (8703.T)

Online broker kabu.com Securities plans to form an alliance
Morgan Stanley (MS.N) under which kabu.com will sell Morgan
Stanley's financial products to retail investors, the Nikkei
business daily reported on Wednesday.

-- Nippon Electric Glass Co (5214.T)

Nippon Electric Glass plans to spend about 40 billion yen to
boost output of glass substrates used to make liquid crystal
displays (LCD) by 10 percent next year, the Nikkei business daily
reported on Wednesday.

-- NTT DoCoMo (9437.T)

NTT DoCoMo, Japan's biggest mobile operator, will sell its
16.5 percent stake in cell phone company U Mobile this month,
pulling out of the Malaysian market. [ID:nBNG463971]
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)