* Nikkei rebounds on short-covering * Eyes on movement of dollar against yen
* JAL slips despite news of additional suitor TOKYO, Sept 15 (Reuters) - Japan's Nikkei stock average rose 0.5 percent on Tuesday, buoyed by Toyota Motor Corp and other exporters as the yen retreated against the dollar, but worries that it may only be a brief respite limited gains.
Japan Airlines failed to add to gains made the previous day despite news that Air France-KLM 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 choosing 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 54.32 points to 10,256.38 after falling 2.3 percent the day before. The broader Topix gained 0.3 percent to 936.97.
JAL fell 2.3 percent to 172 yen. It had surged 8 percent on Monday following news that it was in talks on investment by American Airlines and Delta Airlines.
NEC Corp rose 1.3 percent after Japan's No.3 handset maker said it would take over the cellphone operations at Casio Computer Co and Hitachi Ltd as the struggling sector bands together to cut costs and survive a fast-shrinking market.
Exporters climbed as the dollar rose against the yen, crawling back above the 91 yen level, after falling as low as 90.18 yen the day before.
Short-covering helped boost Canon Inc 3.2 percent to 3,560 yen, Honda Motor Co 1.6 percent to 2,825 yen, and Toyota, which gained 1.1 percent to 3,780 yen. (Reporting by Elaine Lies; Editing by Edwina Gibbs)