Nikkei rises 0.2 pct in choppy trade, JAL lower

* Nikkei gains ground after sharp fall, as dlr/yen steady

* JAL down despite news Air France-KLM seeking stake

* Daikin jumps, to sell H1N1 virus-fighting air purifier

* Economic optimism may fade -analyst

By Aiko Hayashi

TOKYO, Sept 15 (Reuters) - Japan's Nikkei average edged up 0.2 percent in choppy trade on Tuesday, buoyed by Canon Inc (7751.T) and other exporters as the yen held steady against the dollar, but worries that it may only be a brief respite limited gains.

Japan Airlines (9205.T) failed to add to gains made the previous day despite news that Air France-KLM (AIRF.PA) was joining a list of suitors seeking a minority stake in the loss-making Japanese carrier. [ID:nT194467]

But Daikin Industries Ltd (6367.T), the world's No.2 air conditioner maker, jumped 5 percent after it said it planned to start selling an air purifier that it claims can break down the H1N1 flu virus completely. [ID:nT204372]

"The market is being supported by a halt in the yen's appreciation against the dollar and as hot money is flowing into commodities and stocks encouraged by near zero interest rate policies in Japan, the United States and Europe," said Takahiko Murai, general manager of equities at Nozomi Securities.

"But players in the bond market have been factoring in the possibility that the (global) economy might hit a second bottom going forward and optimism in the stock market about an economic recovery will also likely fade eventually."

U.S. and Japanese government bond yields have been falling over the past several weeks on doubts about economic recovery prospects. [US/]

The benchmark Nikkei .N225 rose 15.56 points to 10,217.62, after falling 2.3 percent the day before. The broader Topix dipped 0.2 percent to 932.52.

Trade was thin and choppy, with the benchmark venturing into negative territory at one stage when the dollar briefly fell back below 91 yen.

The dollar was up 0.2 percent at 91.07 yen JPY=, after hitting a 7-month low at 90.18 on Monday. [FRX/] Investors fret about a stronger yen as it curbs exporters' profits when they are repatriated.

"The market clearly fell too far yesterday, and we're seeing some short covering, but this sort of drifting is likely to continue for some time," said Hideyuki Ishiguro, a supervisor at the investment strategy department of Okasan Securities.

"We need to watch and see if the yen continues to be strong. Also, some investors are waiting to see what sort of policies the new government enacts, so some may refrain from buying."