* Investor confidence helped by Dow's 8-day winning run
* Casio Computer soars on possible cellphone merger news
* Eyes on Japan Aug. 30 election, post-election policies
* Trade thin; market lacks specific direction - analysts
By Aiko Hayashi
TOKYO, Aug 28 (Reuters) - The Nikkei share average rose 0.5 percent on Friday, as exporters such as Kyocera Corp gained, while investors focused on Japan's Aug. 30 election and Chinese stock moves.
And eight day rising streak for the Dow supported sentiment, and big gainers in Tokyo included Casio Computer Co which surged after sources said it, NEC Corp and Hitachi Ltd are in talks to merge their struggling cellphone operations.
Analysts say investors have factored in a big win for Japan's opposition Democratic Party in the election and the focus is now shifting to post-election events, including who will be the next finance and economy ministers.
"The view on economic fundamentals hasn't changed, but the market seems to lack a clear direction lately as it doesn't have additional factors to keep pushing higher," said Yutaka Miura, senior technical analyst at Mizuho Securities.
"The election result will likely be neutral for the market (on Monday) as it hadn't moved in relation to the election to begin with. Rather, the focus will be whether the new administration can implement measures that will have an impact on corporate earnings and the economy in the mid- to long-term."
The Democrats lead Prime Minister Taro Aso's Liberal Democratic Party in newspaper polls ahead of the election. An opposition victory would end more than five decades of almost continuous rule by the LDP and raise the chances of breaking a stalemate in a divided parliament.
In light trade, the benchmark Nikkei added 56.65 points to 10,530.62, after falling 1.6 percent the previous day.
The broader Topix inched up 0.4 percent to 968.17.
"A change of government in Japan is finally getting closer to becoming a reality and the market could have a strong finish if investors start to expect gains following the results of the election," said Kazuhiro Takahashi, general manager at Daiwa Securities SMBC.
The Dow industrials posted an eighth straight day of gains on Thursday led by Boeing Co. The U.S. aircraft manufacturer said its long-delayed 787 Dreamliner would make its first flight by the end of the year.
Market players said moves in the Chinese market are also in focus. News from China helped curb investor confidence on Thursday after the country's state council said it would restrict licences for steel and cement production to clamp down on overcapacity.
CASIO COMPUTER SURGES, EXPORTERS HIGHER
Casio Computer Co shot up to 909 yen, while NEC corp rose 0.3 percent to 332 yen and Hitachi gained 1.2 percent to 326 yen.
Among exporters Kyocera rose 1.6 percent to 7,640 yen and Canon Inc climbed 2.2 percent to 3,700 yen.
Tokyo Denpa Co, a maker of quartz oscillators and filters, rocketed 15.8 percent to 735 yen after electronics parts maker Murata Manufacturing Co said it would take 1 million shares in the company..
Toyo Tire & Rubber Co advanced 2.7 percent to 225 yen after saying on Thursday it will invest 10 billion yen ($107 million) to build a tyre factory in China.
But Toyota Motor Corp dipped 0.3 percent to 4,030 yen after saying it would end its production contract with NUMMI, a California plant it has shared with General Motors for 25 years, by March 2010.
Some 886 million shares changed hands on the Tokyo exchange's first section, below last week's morning average of 972 million.
Advancing stocks outnumbered declining ones, 882 to 599. (Reporting by Aiko Hayashi; Editing by Edwina Gibbs)