TOKYO, Jan 25 (Reuters) - Japan's Nikkei average is set to rise on Tuesday, with optimism ahead of earnings and a rebound in global equities after last week's pull-back expected to lift investor sentiment and help stocks regain momentum.
Exporters including Canon Inc and Kyocera Corp as well as Japan's biggest personal computer firm, NEC Corp, are due to report this week, setting the tone for the October-December earnings season that will last until early February.
Many analysts expect strong announcements based on the pick up in global economy and demand in the U.S. as well as a dollar/yen rate which has kept above Tokyo firms' conservative estimates for the quarter.
The main Wall Street indices rose between 0.6 percent and 1 percent, led by technology and resource stocks, with technical indicators suggesting the market will continue to rally on the back of a generally strong earnings season.
"Technicals such as stochastics show that high-tech shares like Fanuc, TDK and Kyocera are now very reasonably priced, and we may see investors actively buying those stocks," said Hiroichi Nishi, general manager at Nikko Cordial Securities."
Nikkei futures in Chicago closed at 10,415, up 0.7 percent from the close in Osaka.
Market players said that gains in the benchmark may be limited as domestic investors will likely continue selling stocks such as banks, which have outperformed the Nikkei's recent advance.
Investors will also be keeping an eye on the outcome of the Bank of Japan's two-day policy meeting later on Tuesday.
It is expected to slightly tweak its growth forecasts while keeping monetary policy on hold and sticking to its view that firm demand in Asia will pull the economy out of stagnation in a few months' time.
Resource stocks may outperform after their U.S. peers gained as base metal prices rose on supply fears.
Analysts say the benchmark Nikkei is expected to move between 10,300 and 10,450.
STOCKS TO WATCH:
--Toshiba Corp
Toshiba is hammering out a deal to outsource fabrication of advanced system chips to U.S. firm GlobalFoundries, the Nikkei business daily reported, citing company sources.
The two sides are in the final stages of negotiations, Doug Grose, chief executive officer of the American foundry, told the Nikkei in an interview.
--Mazda Motor
Mazda said on Monday it would join a growing list of automakers entering the electric car market, starting with lease sales of a battery-run subcompact in Japan in the spring of 2012.
--Resona Holdings
Resona said it would raise a lower-than-expected $6.6 billion in its global share offering, in a sign investors are sceptical of the Japanese bank's growth prospects as it weans itself from government control.
--Toray Industries
Daimler AG and Japanese textile maker Toray Industries will form a joint venture to produce and sell lightweight carbon fibre parts aimed at improving the fuel economy of cars, they said on Monday.
--Honda Motor
Honda said on Monday it would take a hit of about $182 million in its October-December pre-tax profit due to improper transactions at its trading unit.
--Asahi Kasei Corp.
Asahi Kasei plans to invest $242 million to raise production capacity for a resin material at its South Korean site, the Nikkei business daily said.
--TDK Corp.
TDK has found a way to manufacture minuscule modules for smartphones that pack features into a 30 percent smaller footprint than usual, the Nikkei newspaper said on Tuesday. (Reporting by Antoni Slodkowski; Editing by Joseph Radford)