* Exporters rise on short-covering, Canon climbs on upgrade
* Nippon Electric Glass jumps on report of output boost
* New Japan govt's currency policies in focus - analyst
* Investors cautious ahead of long weekend
By Aiko Hayashi
TOKYO, Sept 16 (Reuters) - Japan's Nikkei average rose 1.2
percent on Wednesday, buoyed by exporters such as Canon Inc
<7751.T> after retail sales data helped boost investor confidence
and lifted U.S. stocks to highs for the year.
But analysts said gains were likely to be limited as
investors carefully monitor policies of Japan's incoming
government.
Yukio Hatoyama takes office as prime minister and is expected
to announce his cabinet line-up on Wednesday after a huge
election win on Aug. 30. []
"Japanese companies with global operations are being bought
for now, with investors encouraged by (Federal Reserve Chairman
Ben) Bernanke's comment that the recession was probably at an end
and after solid retail sales data," said Fumiyuki Nakanishi,
manager at SMBC Friend Securities.
Bernanke, speaking on the one-year anniversary of the
collapse of Lehman Brothers <LEHMQ.PK>, said the recession "is
very likely over." []
"But the new government is seen as tolerant towards a
stronger yen, which is negative for the stock market, and
investors are now cautiously looking for further comments on its
currency policies," Nakanishi said.
In thin trade, the benchmark Nikkei <> gained 121.81
points to 10,339.43 by the midday break, after edging up 0.2
percent the day before. The broader Topix <> added 0.8
percent to 940.07.
Investors were also reluctant to actively take positions
ahead of a stretch of public holidays Sept. 19-23, market players
said.
U.S. stocks rose on Tuesday to 2009 highs as improvement in
retail sales in August reassured investors about a rebound in
U.S. economic demand. A rise in the government's Producer Price
Index signalled increased consumption of raw materials. []
[]
EXPORTERS GAIN, STEELMAKERS UP
Nippon Electric Glass <5214.T> shot up 4.1 percent to 948 yen
after the Nikkei business daily said the company plans to spend
about 40 billion yen ($440 million) to boost output of glass
substrates used to make liquid crystal displays by 10 percent
next year.
Exporters climbed on short-covering and were also helped by a
halt in the yen's advance against dollar <JPY=>. The dollar hit a
seven-month low below 91 yen earlier this week.
Investors fret about a stronger yen as it curbs exporters'
profits when they are repatriated.
Canon Inc <7751.T> jumped 5.1 percent to 3,730 yen, after
Nomura Securities raised its rating on the company to "buy" from
"neutral" and hiked its target price to 4,218 yen from 3,462 yen.
Nomura cited Canon's Monday announcement that it will start
providing its latest multi-functional printers to Hewlett-Packard
<HPQ.N> later this year. []
Tokyo Electron Ltd <8035.T> gained 4 percent to 5,500 yen and
industrial robot maker Fanuc Ltd <6954.T> added 2.1 percent to
7,750 yen.
Olympus Corp <7733.T> advanced 3.9 percent to 2,515 yen after
Credit Suisse reinstated coverage of the camera and medical
equipment firm with an "outperform" rating and a target price of
3,100 yen.
The brokerage said enhanced valuation of the medical business
would benefit Olympus as the only comprehensive endoscope maker
globally.
Nippon Steel <5401.T> and JFE Holdings <5411.T> climbed after
J.P. Morgan started coverage of both firms at "overweight",
noting that the steel market has bottomed and is now rebounding,
while Kobe Steel <5406.T> rose after coverage was initiated at
"neutral".
Nippon Steel rose 2.7 percent to 344 yen, JFE Holdings gained
1.9 percent to 3,260 yen and Kobe Steel added 1.2 percent to 163
yen.
Some 827 million shares changed hands on the Tokyo exchange's
first section, below last week's morning average of 1.1 billion.
Advancing stocks outnumbered declining ones, 907 to 575.
(Editing by Chris Gallagher)
