TOKYO, Feb 20 (Reuters) - Japan's Nikkei average is expected to open higher on Wednesday as Wall Street shares edged up to near record highs, although gains are likely to be capped with investors focusing on who will become the next Bank of Japan governor. The Nikkei is likely to trade between 11,300 and 11,450, strategists said. Nikkei futures in Chicago closed at 11,425 on Tuesday, up 0.5 percent from the Osaka close of 11,370. "There was concerned that the Dow industrial average would struggle before 14,000 but yesterday it broke above 14,000 ... This is a positive factor for the Japanese market," said Takashi Hiroki, chief strategist at Monex Inc. U.S. stocks rose overnight as this year's ongoing surge in merger activity suggested investors were still finding value in the market even as indexes closed in on all-time highs. But Hiroki said investors were unlikely to chase the Tokyo market too hard as they would be focused on whom the government will nominate as the next central bank governor next week. The government has delayed nominating a governor by a week, fanning talk of friction between the prime minister and the finance minister over who should run the central bank and take aggressive action to revive the economy. The Nikkei slipped 0.3 percent to 11,372.34 on Tuesday, while the broader Topix index added 0.1 percent to 963.61. Societe Generale said the most-traded Nikkei index option expiring in March was a call at 12,500, up nearly 10 percent from where the index closed on Tuesday. The next most-traded was another call at 12,250, followed by a put at 10,500 and another call at 12,000. The benchmark Nikkei is up 9.4 percent since the start of this year, spurred by the yen's weakness, after rallying 22.9 percent in 2012. Most of the gains last year came in the final six weeks after Prime Minister Shinzo Abe called for the BOJ to adopt bolder monetary policy in his election campaign. Japanese equities carry a 12-month forward price-to-earnings ratio of 13.8, a level not seen since March 2011, according to Thomson Reuters Datastream. That compared with a 10-year average of 16.4. > M&A deals lift Wall Street shares nearer a record high > Yen climbs broadly after Japan finmin's comments > U.S. bond prices fall as stock gains pare bids > Gold drops near 6-month low on economic optimism > Oil rises, following U.S. equities higher STOCKS TO WATCH --JAPAN TOBACCO INC The Japanese government's sale of a $10 billion stake in Japan Tobacco, the world's third-largest tobacco company, is expected to kick off within days after bankers met on Tuesday over deal details, sources close to the deal told Reuters. --ORIX CORP The Japanese financial services firm said on Tuesday it has agreed to buy Dutch asset manager Robeco from its owner Rabobank for 1.94 billion euros ($2.6 billion) in a cash and stock deal. --TOYOTA MOTOR CORP Toyota Motor will ramp up production in Japan in April by about 10 percent on higher-than-expected domestic sales and increased profitability of exports due to a weaker yen, the Nikkei reported.