Nikkei likely to rise on hints recession easing

By Elaine Lies

TOKYO, April 30 (Reuters) - Japan's Nikkei stock average is
likely to rise on Thursday after U.S. stocks climbed on a Federal
Reserve suggestion that the recession may be easing, with
exporters such as Canon Inc (7751.T) likely to benefit from a
weaker yen.

Nikkei futures traded in Chicago 2NKc1 closed at 8,815, up
3.5 percent from the Tuesday Osaka close of 8,510 JNIc1.
But gains will be capped by worries about struggling U.S.
carmaker Chrysler, which was engaged in last-ditch talks to avoid
bankruptcy with a day remaining until a government-imposed
bankruptcy deadline. [ID:nLT878745]

Japanese industrial production March data due at 2350 GMT --
expected to show the first rise in six months -- could also have
an impact on trade. ECONJP

Investors may focus on Shinsei Bank (8303.T) and Aozora Bank
(8304.T) after Jiji news agency reported on Wednesday a merger
between the two had not won the backing of major shareholders
[ID:nT145835].

Little immediate impact is likely from the World Health
Organisation raising the global flu alert to level 5, with
positive signs for the U.S. economy proving stronger at this
point, market players said. [ID:nFLU]

"Fundamentally, there's definitely some signs of brightening
in the economy, and this is good for the market, along with the
weaker yen," said Hiroichi Nishi, general manager at the equity
division of Nikko Cordial Securities.

"But worry about Chrysler will keep gains capped."

U.S. gross domestic product data dropped at a 6.1 percent
annual rate in the first quarter, but data showed consumer
spending rose and a decline in inventories suggested
manufacturers and retailers will have to stock up on merchandise
[ID:nN29419669].

The Federal Reserve said on Wednesday the outlook for the
U.S. economy had improved a bit in recent weeks. [ID:nN29410693].

The benchmark Nikkei .N225 is likely to move between 8,550
and 8,850, market players said. It closed at 8,493.77 on Tuesday,
ahead of a holiday on Wednesday.
----------------------MARKET SNAPSHOT @ 2257 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 873.64 2.16% 18.480
USD/JPY JPY= 97.54 -0.09% -0.090
10-YR US TSY YLD US10YT=RR 3.1073 -- 0.000
SPOT GOLD XAU= 895.8 -0.20% -1.800
US CRUDE CLc1 50.58 -0.77% -0.390
DOW JONES .DJI 8185.73 2.11% 168.78
-------------------------------------------------------------
> Wall St jumps after data, Fed hint recession easing [.N]
> Dollar rises vs yen as Fed gives less dire US outlook [USD/]
> Bonds fall as Fed gives hopeful outlook [US/]
> Gold rises, unhindered by stocks rally, Fed [GOL/]
> Oil rises on hop recession easing [O/R]
STOCKS TO WATCH

-- Orix Credit Corp (8591.T)

Sumitomo Mitsui Financial Group (8316.T) is in talks to
acquire a 51 percent stake in mid-size consumer finance firm Orix
Credit Corp for 20 billion yen to 30 billion yen, the Nikkei
business daily reported on Wednesday without citing sources.
[ID:nBNG426536]

-- Daiwa Securities Group (8601.T)

Daiwa, Japan's second-largest brokerage, posted a third
straight quarterly net loss, hit by a drop in fees from its
investment banking and brokerage businesses. [ID:nT361856]

-- Honda Motor Co (7267.T)

Honda lost a smaller-than-expected $2.9 billion in the latest
quarter but said it expects to stay in the black in the current
year, counting on cost cuts to help it weather the stronger yen
and plunging car sales worldwide. [ID:nT11415]

-- Pioneer Corp (6773.T)

Japanese car electronics maker Pioneer said on Tuesday Honda
Motor (7267.T) will invest 2.5 billion yen in it by buying new
shares as part of plans to return to profit by the year to March
2011. [ID:nT92843]

-- NTT DoCoMo (9437.T)

NTT DoCoMo, Japan's biggest mobile phone operator, said on
Tuesday that its group operating profit for the financial year
just ended rose 2.8 percent but was likely to be flat or even
decrease slightly in the current year, less than forecast by
analysts.

-- Tokyo Electron (8035.T)

Tokyo Electron, the world's No.2 supplier of chip making
equipment, doubled its operating profit guidance to far above the
market consensus, as it tallied up cost cuts and a lower tax
burden. [ID:nT116368]

-- Toshiba Corp (6502.T)

Toshiba, shackled by its loss-making chip operations, plans
to set up a chip venture in Japan with Amkor Technology (AMKR.O)
of the United States and supplier Nakaya Microdevices in a bid to
cut costs. [ID:nT90893]

-- Oriental Land (4661.T)

Oriental Land, the operator of Tokyo Disney resort, said on
Tuesday it would cancel 4.2 million of its own shares, or 4.4
percent of those outstanding, on May 12.
(Editing by Rodney Joyce)