TOKYO, Aug 21 (Reuters) - Japan's Nikkei stock average is set to rise on Friday, with exporters strong after U.S. manufacturing data underlined investor hopes of recovery and a rebound in Chinese shares providing additional reassurance.
Japan Airlines Corp (JAL) and shipping firm Nippon Yusen may draw attention after the Nikkei business daily reported they plan to integrate their air cargo businesses next April.
But some analysts cautioned that recovery is likely to be slow, with economic data still mixed after positive U.S. manufacturing data from the Federal Reserve Bank of Philadelphia offset disappointment with the second straight rise in weekly jobless claims.
"We're seeing a situation where stocks are rising in the midst of a still tough economic situation," said Kenichi Hirano, operating officer at Tachibana Securities.
"Stocks are likely to keep on rising, but it will be with dips along the way, and substantial gains will take time."
Chinese shares on Thursday surged 4.5 percent, their second-biggest daily percentage gain of the year, after modest signs of official support helped trigger technical buying after a 20-percent dive in the two weeks to Wednesday's close.
Japanese investors will also keep their eyes on developments in the run-up to an Aug. 30 election amid newspaper predictions that the opposition Democratic Party may be headed for a landslide victory, trouncing the conservative party that has ruled for most of the past half-century.
The benchmark Nikkei is expected to move between 10,200 and 10,500, market players said, though activity could change depending on what happens with Chinese shares. The Nikkei rose 1.8 percent to close at 10,383.41 on Thursday.
In a sign the market is likely to open higher, Nikkei futures traded in Chicago rose 0.6 percent from the Osaka close of 10,360. STOCKS TO WATCH
-- Fanuc Ltd
Industrial robot maker Fanuc Ltd will buy back 89.5 billion yen ($949 million) worth of its shares, and shareholder Fujitsu Ltd said it was considering selling its stake.
-- Mitsubishi UFJ Financial Group, banks
Mitsubishi UFJ Financial Group and other Japanese banks may rise in the wake of gains by their U.S. peers, which were the biggest contributor to Wall Street's rise on Thursday.
-- Mazda Motor Corp
Mazda aims to start selling clean-diesel cars in Japan and Europe in 2011, the Nikkei business daily said.
-- Itochu Corp
Itochu will take a 20 percent stake in Yokohama Rubber Co Ltd's planned tyre venture in Russia, slated for production to start in 2011 and to be capitalised at 11.7 billion yen ($124 million), the Nikkei business daily said. (Reporting by Elaine Lies; Editing by Chris Gallagher)