* Nikkei clings to gains in thin trade
* Eyes on movement of dollar against yen
* JAL down despite news Air France-KLM seeking stake
By Elaine Lies
TOKYO, Sept 15 (Reuters) - Japan's Nikkei stock average edged
up 0.1 percent, buoyed by Toyota Motor Corp <7203.T> and other
exporters as the yen held steady against the dollar, but worries
that it may only be a brief respite limited gains.
Japan Airlines <9205.T> failed to add to gains made the
previous day despite news that Air France-KLM <AIRF.PA> was
joining a list of suitors seeking a minority stake in the
loss-making Japanese carrier. []
"The market clearly fell too far yesterday, and we're seeing
some short covering, but this sort of drifting is likely to
continue for some time," said Hideyuki Ishiguro, a supervisor at
the investment strategy department of Okasan Securities.
"We need to watch and see if the yen continues to be strong.
Also, some investors are waiting to see what sort of policies the
new government enacts, so some may refrain from buying."
Yukio Hatoyama will take office on Wednesday after his
Democratic Party's huge election win over the long-dominant
Liberal Democratic Party.
The Nikkei business daily said on Tuesday that Hatoyama has
decided to appoint veteran lawmaker Hirohisa Fujii as finance
minister. [] []
"He is a former finance minister and has experience which is
well respected by many people, so I don't think the choice of him
will rock markets," said Yasunari Ueno, chief market economist at
Mizuho Securities.
"We're looking at how he will wrestle with the task of coming
up with the necessary funds to finance the party's pledges.
The benchmark Nikkei <> rose 11.64 points to 10,213.70
after falling 2.3 percent the day before. The broader Topix
<> lost 0.2 percent to 931.94.
Trade was thin and choppy, with the benchmark briefly
venturing into negative territory late in the morning when the
dollar briefly fell back below 91 yen.
"Though the yen's rise appears to have halted for a while,
it's hard to predict what's going to happen, and investors can't
feel confident about the direction," said Takashi Ushio, head of
the investment strategy division at Marusan Securities.
The dollar was up 0.1 percent at 91.02 yen <JPY=>.
JAL IN SPOTLIGHT
Air France-KLM <AIRF.PA> is in talks to inject hundreds of
millions of dollars into JAL <9205.T>, a source familiar with the
matter said.
Delta Air Lines <DAL.N> and American Airlines <AMR.N> are in
separate 'early stage' talks with Japan's carrier. All hope to
gain access to its route network. []
"I think this is a real plus, as there were some doubts about
whether JAL would be able to carry out its restructuring plans
alone," said Marusan's Ushio.
Meanwhile, JAL plans to cut overseas flights and increase
personnel cuts over the next three years in a bid to slash
operating costs by 30 percent, Japanese media said on Tuesday.
JAL lost 1.7 percent to 173 yen.
NEC Corp <6701.T> pared gains but still rose 0.7 percent to
302 yen after Japan's No.3 handset maker said it would take over
the cellphone operations at Casio Computer Co <6952.T> and
Hitachi Ltd <6501.T> as the struggling sector bands together to
cut costs and survive a fast-shrinking market. []
Casio shares gained 0.5 percent to 833 yen, while Hitachi was
flat. All were off earlier highs.
Exporters, which led the Nikkei higher during early trade on
short covering, pared their gains.
Canon Inc <7751.T> rose 3.5 percent to 3,570 yen, Honda Motor
Co <7267.T> added 0.9 percent to 2,805 yen and Toyota gained 0.3
percent to 3,750 yen.
Trade was thin on the Tokyo exchange's first section, with
807 million shares changing hands, below last week's morning
average of 1.1 billion.
Declining stocks outnumbered advancing ones, 928 to 573.
(Additional reporting by Tokyo newsroom; Editing by Chris
Gallagher)
