Nikkei to rise on Wall St rally but gains limited

TOKYO, Oct 1 (Reuters) - Japan's Nikkei average is expected
to rise on Wednesday after a Wall Street surge prompted by
investor hopes that Washington will revive a plan to stabilise
the U.S. financial sector.

Mitsubishi UFJ Financial Group (8306.T) and other financials
are likely to lead the rise, along with exporters, but domestic
factors such as the Bank of Japan's quarterly tankan survey of
business sentiment -- out before the opening -- may limit gains.

"Tokyo shares, like Wall Street, will rise on expectations of
a revived bailout plan, but there are limits to how far these
hopes alone can take it," said Yumi Nishimura, deputy general
manager at Daiwa Securities SMBC.

"Problems in Europe still remain, and even though poor
figures for the tankan are factored in to some extent, it isn't
likely to be a plus."

Exporters are also expected to help lead the benchmark Nikkei
.N225 higher after the dollar surged on Tuesday.

The Nikkei is expected to move between 11,350 and 11,650
after closing at 11,259.86 on Tuesday, down 4.1 percent at a
three-year closing low.

Nikkei futures traded in Chicago closed at 11,655 2NKc1
compared to the Osaka close of 11,320 JNIc1.
----------------------MARKET SNAPSHOT @ 2220 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1164.74 5.27% 58.350
USD/JPY JPY= 106.02 -0.01% -0.010
10-YR US TSY YLD US10YT=RR 3.8215 -- 0.246
SPOT GOLD XAU= 870.4 0.05% 0.450
US CRUDE CLc1 102.11 1.46% 1.470
DOW JONES .DJI 10850.66 4.68% 485.21
-------------------------------------------------------------
> US STOCKS-Wall St rallies on bailout revival hopes [.N]
> U.S. dollar rallies on quarter-end transactions [USD/]
> Bonds plunge in unwinding of recent safety buying [US/]
> Gold retreats as stocks rally, dollar jumps [GOL/]
> Oil rises $6 on U.S. bailout optimism [O/R]

STOCKS TO WATCH

-- Hoya Corp (7741.T), Showa Denko (4004.T)

The two companies said on Tuesday they will merge their hard
disk media businesses and will set up a joint venture around
January next year.

Showa Denko will own 75 percent of the new company, and Hoya
will own the rest.

-- Nippon Steel Corp (5401.T), Topy Industries Ltd (7231.T)

Nippon Steel Corp said on Tuesday it will boost its stake in
affiliate Topy Industries Ltd (7231.T) to up to 20 percent as it
aims to expand output of high-grade steel and push realignment in
the fragmented construction steel industry. [ID:nT319167]

-- Kobe Steel Ltd (5406.T)

Kobe Steel lifted its annual group net profit forecast by 10
percent on Tuesday thanks to a drop in crude oil and metal
prices, as well as continued strong demand for high-grade steel
products.

Kobe Steel now expects a group net profit of 75 billion yen
($707.5 million) in the business year to next March, instead of a
68 billion yen profit expected earlier.

-- Japan Airlines Corp (9205.T), All Nippon Airways (9202.T)

Boeing Co (BA.N) said on Tuesday it would reassess the
delivery schedule for its new 787 Dreamliner aircraft to the
Japanese market when a strike ends, raising concerns that a
prolonged production halt could further delay delivery.
[ID:nT312455]

-- Nidec Corp (6594.OS), Fuji Electric Holdings (6504.T)

Nidec Corp will buy Fuji Electric Holdings' industrial motor
unit for nearly 10 billion yen to broaden its motor business, the
Nikkei business daily reported on Wednesday.

Nidec will take about a 60 percent stake in Fuji Electric
Motor Co by January and will raise the stake to 100 percent
within several years, the paper said. Fuji Electric Motor ranks
fourth in the industry with annual sales of more than 20 billion
yen.

-- FamilyMart Co (8028.T)

FamilyMart Co plans to sell drugs at its 100-150 stores
nationwide by 2011/12, becoming the first convenience store chain
to take advantage of the deregulation of over-the-counter drug
sales, the Nikkei business daily reported on Wednesday.
-- Toyota Motor Corp (7203.T)

Toyota is working with five domestic steelmakers to find ways
to cut steel procurement costs, as raw materials costs rise and
sales slow, the Nikkei business daily said on Wednesday.
[ID:nN30535969]

-- Nissan Motor Co (7201.T)

Nissan will have difficulty meeting its annual sales target
set before car demand started to slide in Europe, but is
confident of expanding its market share in the region, a top
executive said on Tuesday. [ID:nT184910]

-- Sanyo Electric Co Ltd (6764.T), Nippon Oil Corp (5001.T)

Sanyo Electric said on Tuesday it would start talks with
Nippon Oil to set up a thin-film solar cell joint venture, in a
move to secure much-needed funding for one of its growth
operations. [ID:nT342563]
($1=106.01 Yen)
(Reporting by Elaine Lies; Editing by Michael Watson)