Nikkei hits 10-mth high on economy optimism, earnings

                                
 * Nikkei's next targets likely 10,500, 10,800 - analysts
                                
 * Astellas jumps, Suzuki slides after earnings results
                                
 * Earnings season in full gear; Toyota to report after bell
                                
 By Aiko Hayashi
                                
 TOKYO, Aug 4 (Reuters) - Japan's Nikkei average hit its
highest point in 10 months on Tuesday, buoyed by exporters such
as Advantest Corp <6857.T> after data on the U.S. manufacturing
sector underscored optimism that the economy is recovering.
                                
 Astellas Pharma <4503.T> jumped 3.1 percent after the
drugmaker reported relatively firm April-June results thanks to
solid sales of its mainstay drugs, but Suzuki Motor <7269.T> slid
after posting an 80 percent drop in quarterly operating profit.
[ID:nT184406] [ID:nT167511]
                                
 Japan's earnings season continues, with Toyota Motor Corp
<7203.T> among companies set to report results later in the day.
                                
 "A further improvement in economic indicators around the
world and stronger-than-expected corporate earnings are giving a
further boost to global stock markets, including Japan," said
Yumi Nishimura, deputy general manager at Daiwa Securities SMBC.
                                
 "Still, even though the overall trend is facing upward,
investors will likely take profits in the short term."
                                
 In active trade, the benchmark Nikkei <.N225> gained 1.1
percent or 110.14 points to 10,462.61, after briefly rising as
far as 10,479.19, its highest level since Oct. 6.
                                
 Market players said the next targets for the Nikkei would be
10,500, which is psychologically important and also a target
level for futures and options, and then 10,800, a level last seen
in October.
                                
 The broader Topix <.TOPX> added 1 percent to 967.07.
                                
 U.S. stocks rose on Monday, pushing the S&P 500 index <.SPX>
above 1,000 for the first time in nine months, after the
Institute for Supply Management said its index of national
factory activity rose to 48.9 in July, the highest since August
2008. The figure was higher than analysts had expected.
[ID:nN03439889]
                                
 Separately, a survey showed on Monday that global factory
business activity stabilised in July as new orders and output
recovered to levels not seen in well over a year. [ID:nL3706548]
                                
 Market players said as the peak of earnings season passes
investors will be gradually shifting their attention to economic
data due later in the week.
                                
 "The market focus will move to macro data from micro in the
latter part of the week as U.S. jobs data is really important,"
said Masayoshi Okamoto, head of dealing at Jujiya Securities.
                                
 The U.S. economy is expected to have lost 320,000 nonfarm
payroll jobs in July, a hefty number but still an improvement
over last month's drop of 467,000. The unemployment rate is
expected to rise to 9.6 percent. The figures will be released on
Friday.
                                
 "If the jobless rate turns out to be 10 percent or something,
that would likely deal a blow to the global markets. That's why
investors are turning cautious as they wait to see the actual
figures," Okamoto said.
                                
 ASTELLAS JUMPS, SUZUKI SKIDS
                                
 High-tech exporters rose, with chip-tester maker Advantest
jumping 4.6 percent to 2,170 yen and electronic parts maker
Kyocera Corp <6971.T> adding 1.6 percent to 7,720 yen.
                                
 Elpida Memory Inc <6665.T> rose 1.8 percent to 1,197 yen
after it said it was in talks about taking over German chipmaker
Qimonda's <QMNDQ.PK> high-end graphics DRAM operations.
[ID:nT354062]
                                
 Panasonic Corp <6752.T> gained 1.4 percent to 1,523 yen after
reporting a smaller-than-expected quarterly loss and lifting its
half-year outlook as it cuts costs to cope with a firmer yen and
weak TV sales. [ID:nT167959]
                                
 Investors picked up shares of companies with solid earnings,
while they dumped those that disappointed.
                                
 Astellas, the No.2 Japanese drugmaker, advanced to 3,720 yen.
The drugmaker kept its earnings targets unchanged.
                                
 Akebono Brake Industry Co <7238.T> shot up 4.3 percent to 625
yen after the auto parts maker said its first-half losses were
likely to be smaller than expected thanks to a recovery in
demand.
                                
 But Suzuki Motor slid 3.7 percent to 2,330 yen after the
automaker posted an 80 percent drop in quarterly operating profit
hit by a stronger yen and declining sales.
                                
 It stuck to its annual forecasts amid an uncertain outlook
for global vehicle demand.
                                
 Daihatsu Motor Co <7262.T> lost 5.4 percent to 1,003 yen a
day after reporting a 73 percent drop in its April-June operating
profit and following a downgrade by Goldman Sachs to "neutral"
from "buy".
                                
 Some 1.2 billion shares changed hands on the Tokyo exchange's
first section, above last week's morning average of 959 million.
                                
 Advancing stocks outnumbered declining ones by 2 to 1.
 (Editing by Michael Watson)