Nikkei set to gain after banks optimism lifts Wall St

TOKYO (Reuters) - Japan's Nikkei average is likely to rise on Tuesday, with exporter shares such as Canon Inc (7751.T) seen higher after bullish analyst comments on financial sector performance helped lift U.S. stocks more than 2 percent.

Market analysts said a halt in the yen's sharp appreciation against the dollar would also likely help the Nikkei rise from an eight-week closing low booked on Monday.

Shares of automakers will likely be in focus.

The Nikkei business daily said major Japanese carmakers such as Nissan Motor Co (7201.T) and Honda Motor (7267.T) are raising production capacity in China as brisk local demand helps prop up their earnings at a time when sales virtually everywhere else are in a steep slump.

"U.S. stocks climbed on analyst comments ahead of earnings by financial companies. This will likely help trigger a rebound in the Nikkei, which was pushed down to finish the previous day at its lows," said Kazuhiro Takahashi, general manager at Daiwa Securities SMBC.

In comments to CNBC television, analyst Meredith Whitney said bank shares were in for at least a short-term gain of 15 percent.

She said major financials, including Bank of America Corp (BAC.N) and JPMorgan Chase & Co (JPM.N), which along with Goldman Sachs (GS.N) are scheduled to report results this week, could do well in the second quarter.

Whitney, who has in the past been bearish, also upgraded Goldman to "buy," driving its stock higher.

"But investors will likely stay on the sidelines after the Nikkei recovers some of the losses made yesterday as they need to see how financials' earnings actually play out," Takahashi said.

Nikkei futures traded in Chicago jumped 3 percent from their Osaka close of 9,040, pointing to a higher start.

Market players expect the Nikkei average .N225 to trade between 9,100 and 9,300 on Tuesday. It slid 2.6 percent the previous day to 9,050.33, its lowest finish since May 18. The index has slid for nine days, losing 9.1 percent.

In early Asia trade, the dollar was trading around 93 yen after hitting a five-month trough of 91.73 yen.

On Monday, the Standard & Poor's 500 Index .SPX gained 2.5 percent.

STOCKS TO WATCH

-- Komatsu Ltd (6301.T)

Komatsu will likely report a 94 percent year-on-year fall in operating profit to 5 billion yen ($54 million) for the April-June quarter, hit by weak demand for construction machinery in Japan, the U.S. and Europe, the Nikkei business daily reported on Tuesday.

But cost cuts and recovering demand in China and other emerging economies helped Komatsu regain profitability after a 48.2 billion yen operating loss in the January-March quarter, the Nikkei said.

-- NEC Electronics Corp (6723.T)

Chipmakers NEC Electronics and Renesas Technology Corp plan to boost output of microcontrollers to meet growing demand triggered in part by strong sales of electronic appliances in China, the Nikkei business daily said.

Renesas, which has announced plans to merge with NEC Electronics, plans to return its main microcontroller plant in Japan to full capacity by September for the first time in about a year, up from the current 80-90 percent, the Nikkei said.

-- GS Yuasa Corp (6674.T)

Battery maker GS Yuasa said on Monday that it plans to issue new shares to raise up to 36.7 billion yen to invest in lithium-ion battery development.

-- All Nippon Airways (9202.T)

ANA said it plans to raise up to 141.7 billion yen ($1.5 billion) through a planned public share offering to shore up its battered finances.

(Reporting by Aiko Hayashi; Editing by Chris Gallagher)