TOKYO, Aug 5 (Reuters) - Japan's Nikkei average is likely to extend gains on Wednesday from a 10-month closing high set the previous day after U.S. economic data pointed to a sustained recovery from the recession and buoyed Wall Street.
Toyota Motor Corp will be in focus after the world's biggest automaker forecast a slightly shallower annual loss, but slipped to its third straight quarterly loss as sales sank in Japan, Europe and the United States.
"The market will get solid support by growing optimism about the economic recovery and the bottoming out of corporate earnings prospects," said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.
"But profit-taking pressure is likely to emerge, keeping the market within a narrow range, after Japanese stocks scored fresh highs yesterday and ahead of important U.S. economic indicators such as the jobs data."
The U.S. economy is expected to have lost 320,000 nonfarm payroll jobs in July, a hefty number but still an improvement over last month's drop of 467,000. The unemployment rate is expected to have risen to 9.6 percent. The figures will be released on Friday.
Market players said Toyota shares may face profit-taking as immediate trading factors have run their course with its earnings report out of the way and as the stock had already gained sharply.
Nikkei futures traded in Chicago rose 0.9 percent from their Osaka close on Tuesday, pointing to a higher start.
Market participants expect the benchmark Nikkei to move between 10,300 and 10,550 on Wednesday. It inched up 0.2 percent the previous day to end at 10,375.01, its highest close since Oct. 6.
The S&P 500 Index rose 0.3 percent on Tuesday after data showing U.S. consumers spent more in June, though partly because of rising gasoline prices, and contracts to buy used houses rose more than expected and for a fifth-straight month.
Japanese companies scheduled to announce results later in the day include Nikon Corp and Orix Corp. STOCKS TO WATCH
-- Toshiba Corp
Toshiba plans to set up a joint venture in China to make small and midsize LCDs for mobile phones in the first half of next year, the Nikkei business daily said on Wednesday.
-- Sony Corp
Sony will begin selling this month the cheapest digital book reader for the United States, taking rival Amazon.com Inc head-on in the small but fast-growing market for electronic readers.
-- Elpida Memory Inc
Elpida reported a bigger-than-expected quarterly loss as PC chip prices stayed weak and absorbed losses at its joint venture in Taiwan, but nudged up its annual output forecast.
--Fast Retailing
The company said on Tuesday same-store sales at its Uniqlo casual-clothing chain in Japan fell 4.2 percent in July, the first drop in nine months, hit by unseasonably rainy weather.
--ABC Mart
The shoe retailer said its July same-store sales rose 2.7 percent, as its sports shoes sales campaign drove up customer traffic. (Reporting by Aiko Hayashi; Editing by Chris Gallagher)