TOKYO, Sept 16 (Reuters) - Japan's Nikkei average rose 1.2 percent on Wednesday, buoyed by exporters such as Canon Inc 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 will take office as prime minister and is expected to announce his cabinet line-up on Wednesday after a huge election win on Aug. 30.
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. (Reporting by Aiko Hayashi)