* Nikkei up 2.2 pct, on track to snap three-day losing streak
* Techs extend gains on hopes for U.S. recovery
* Shippers, construction machinery up on China hopes
* Elpida shoots up on news it may seek public funds
(Adds stocks, details)
By Elaine Lies
TOKYO, Feb 4 (Reuters) - Japan's Nikkei average rose 2.2
percent on Wednesday as TDK Corp <6762.T> and other tech shares
gained on hopes they may be early winners from an economic upturn,
though concern that such a recovery is distant capped gains.
Elpida Memory Inc <6665.T> climbed after saying it may seek
government funds under a new scheme aimed at supporting
nonfinancial firms hit by the economic crisis [], while
shippers and construction machinery extended gains on hopes
China's economy may start picking up soon.
U.S. stocks rose on Tuesday as news of an alternative
stimulus plan from Senate Republicans suggested lawmakers were
moving closer to a package that would soften the blow of a
deepening recession, with the Nasdaq <> shooting up on hopes
tech shares will be early beneficiaries of a recovery.
"There's some hopes that the United States will reach
agreement on a package, but the benefits of this are limited
right now since a lot remains unclear," said Noritsugu Hirakawa,
a strategist at Okasan Securities.
"Plus, there's still a number of Japanese companies left to
report results and investors want to see how this turns out
before switching to any active buying."
The Nikkei business daily said Sharp Corp <6753.T> is
expected to post an operating loss of more than 10 billion yen
($111.8 million) for the year to March 31, its first loss since
it began reporting operating results in 1953. []
Panasonic Corp <8752.T> is due to report results after the
close and is set to warn of a big annual loss.
But several said tech shares were still likely to do well.
"I don't know about a true recovery yet, but for the next
month or so tech shares may be strong -- after all, how could the
news be any worse than what's come out recently?" said Yutaka
Miura, a senior technical analyst at Shinko Securities.
"Of course, there's likely to be more bad news in three or
four months. But over the near term they'll do well."
The benchmark Nikkei <> climbed 168.58 points to
7,994.09, with selling emerging quickly on any forays above
8,000. The broader Topix <> rose 1.4 percent to 784.26.
ELPIDA AND CHINA HOPES
Kyocera Corp <6971.T>, the world's No.4 solar cell maker,
rose 4.2 percent to 6,210 yen, becoming the biggest contributor
to the Nikkei 225 by volume weight, followed closely by TDK Corp
<6762.T>, which gained 6.5 percent to 3,780 yen.
Elpida, the world's No.3 maker of dynamic random-access
memory (DRAM) chips, has been looking to raise funds after being
forced last year to redeem most of a 50 billion yen ($559
million) convertible bond due to a slide in its share price.
The Japanese cabinet approved a bill on Tuesday aimed at
shoring up struggling companies outside the financial sector. The
government wants to pass the bill in the current parliament
session and could begin accepting applications this spring.
Elpida ended the morning up 5.4 percent at 643 yen. It had
opened up 8 percent.
"This would be a positive move for Elpida, since it's a
company with good technology and really just needs to get its
financial situation into shape," said Okasan's Hirakawa.
"Plus, it may make it easier for other companies to take the
same step."
Shipping firms powered up on hopes for China's economy, which
have pushed the key Baltic Dry freight index <.BADI> to 11
straight business days of gains.
The Chinese government has already pledged 4 trillion yuan
($585 billion) over the next two years to help boost domestic
demand. Work on projects including rebuilding the earthquake-hit
southwest and improving road and rail links is under way.
Premier Wen Jiabao has said more may be needed. []
Mitsui O.S.K. Lines <9104.T> gained 3.4 percent to 604 yen
and Kawasaki Kisen <9107.T> rose 2.6 percent to 362 yen. Nippon
Yusen <9101.T>, Japan's largest shipping firm, rose 0.2 percent.
Komatsu <6301.T> the world's No.2 maker of earth-moving
equipment, jumped 4.2 percent to 1,027 yen, also on hopes for
Chinese growth, while Hitachi Construction Machinery Co <6305.T>
advanced 7.2 percent to 1,052 yen.
But a broad range of defensive shares fell as investors
sought to lock in profits after strong gains among shares popular
during times of economic flux, especially overseas, which have
all risen recently.
Among these were Toto Ltd <5332.T>, the nation's largest
manufacturer of sanitary porcelain, which lost 2.8 percent to 452
yen, and seasoning manufacturer Ajinomoto Co Inc <2802.T>, which
fell 1.5 percent to 727 yen.
Trade was moderate on the Tokyo exchange's first section,
with 846 million shares changing hands, compared with last week's
morning average of 861 million.
Advancing stocks outpaced declining ones 874 to 679.
(Editing by Michael Watson)
