Nikkei expected to rise but gains likely limited

TOKYO (Reuters) - Japan's Nikkei average is set to rise on Wednesday, with bargain hunting of beaten-down exporters like Sony Corp (6758.T) in the wake of Wall Street gains, though rises will likely be limited by the continued firmness of the yen.

One stock to watch will be Fast Retailing Co Ltd (9983.T) after November same-store sales at its domestic Uniqlo casual clothing chain jumped 32.2 percent from the same month a year earlier, marking the biggest monthly gain since March 2001.

U.S. stocks rebounded on optimism after global bellwether General Electric (GE.N) pledged to leave its dividend intact, while financial shares gained on a Federal Reserve move to extend several emergency measures integral to stabilizing banks.

"We're likely to see short covering, but gains on the Nikkei will be limited to around 8,000, since the yen remains strong and the overall mood really can't be changed that easily," said Yumi Nishimura, deputy general manager of the investment advisory section of Daiwa Securities SMBC.

The dollar was fetching around 93.15 yen after falling as low as 92.64 yen on Tuesday.

The benchmark Nikkei .N225 is expected to move from 7,900 to 8,100. It ended Tuesday trade at 7,863.69, a nearly two-week low.

Nikkei futures traded in Chicago closed at 8,075 compared with the Osaka close of 7,880.

STOCKS TO WATCH

-- JFE Holdings (5411.T), Kobe Steel Ltd (5406.T)

Top Japanese steelmakers are considering temporarily shutting down blast furnaces as early as this month in a move to cope with falling demand, the Nikkei business daily reported on Wednesday.

JFE Steel Corp, the core unit of JFE Holdings, is considering shutting down some of its seven blast furnaces in Kurashiki and Fukuyama in western Japan, possibly on a rotating basis, the Nikkei said, while Kobe Steel is deciding whether to shut down one of its three furnaces in western Japan.

The shutdowns may be for two or three days.

Nippon Steel Corp (5401.T) may extend the suspension of a blast furnace in western Japan, it added.

-- NTT Data Corp (9613.T)

Japan's largest domestic system integrator said on Tuesday it aims to increase sales abroad by more than 10-fold by March 2013 as it eyes acquisitions in the Americas and Australia.

-- Honda Motor Co (7267.T)

Honda is scaling back its overseas expansion plans, freezing a project to boost capacity in Turkey and delaying a second plant in India by at least a year, the Nikkei business daily reported on Wednesday.

-- Hitachi Ltd (6501.T)

Japanese electronics conglomerate Hitachi said it and U.S. chipmaker Intel Corp (INTC.O) would jointly develop solid state drive (SSD) memory devices, which are seen as a promising alternative to hard disk drives.

The move marks a strategic shift for Hitachi, the world's third-largest hard drive maker, which until now has not made a commitment to SSD technology.

-- Toyota Motor Corp (7203.T), other automakers

U.S. monthly auto sales in November plunged 37 percent to the lowest level since 1982, data released on Tuesday showed, with Japanese automakers also taking a beating.

U.S. sales for Toyota Motor Co (7203.T) dropped 34 percent, Honda Motor Co (7267.T) fell 32 percent, Ford Motor Co (F.N) was off 31 percent, Nissan Motor Co (7201.T) tumbled 42.2 percent and Chrysler LLC sales fell 47 percent.

(Reporting by Elaine Lies; Editing by Chris Gallagher)