TOKYO (Reuters) - Japan's Nikkei share average is expected to rebound on Wednesday from the previous session's 2-1/2-month closing low as stronger-than-expected U.S. manufacturing data eased concerns about slowing growth in the world's largest economy.
The Nikkei (.N225) was likely to trade between 9,350 and 9,450, strategists said, after Nikkei futures in Chicago closed at 9,375 on Tuesday, up 35 points or 0.4 percent from the Osaka close of 9,340.
"I expect the Tokyo market to rebound. The ISM manufacturing index was very good," said Takashi Hiroki, chief strategist at Monex Inc.
However, he said gains were likely to be limited as many investors were away during a shortened trading week. The Japanese market will close on Thursday and Friday for national holidays.
The Institute for Supply Management said U.S. manufacturing growth came in at its strongest rate in 10 months in April. That reading suggested the economy remains resilient after indications it had lost momentum at the start of the second quarter.
The data boosted U.S. stocks, with the Dow Jones industrial average (.DJI) closing at its highest level in more than four years.
The benchmark Nikkei shed 1.8 percent on Tuesday to 9,350.95, breaking below its 75-day moving average near 9,463.
The broader Topix (.TOPX) lost 1.8 percent to 789.49, breaching 800 for the first time since mid-February.
Of the 62 Nikkei companies that have reported January-March earnings so far, 73 percent of them beat or met market expectations and the remainder came in below analysts' forecasts, data from Thomson Reuters StarMine showed.
> Dow hits 4-year high, lifted by ISM factory data .N > Dollar rises from 2-1/2 month low vs yen on US data
STOCKS TO WATCH
Toyota Motor Corp's (7203.T) April auto sales in the United States shot up 11.6 percent, spurred by passenger cars led by the Camry sedan and the Prius hybrid, while Nissan Motor Co Ltd (7201.T) and Honda Motor Co Ltd (7267.T) both lost market share in the month.
- JAPAN TOBACCO (2914.T)
Japan Tobacco is considering raising cigarette prices in Japan in a bid to reach an average 4 percent growth in earnings at its domestic tobacco operations, its incoming President Mitsuomi Koizumi told the Nikkei newspaper.
(Reporting by Dominic Lau; Editing by Richard Pullin)