TOKYO, June 26 (Reuters) - Japan's Nikkei average is set to rise on Friday and may test the key 10,000 level again, boosted by reassuring news about the U.S. economy, while resource-linked shares are likely to benefit from stronger oil prices.
Nippon Oil Corp may be in focus after a newspaper reported that it and other Japanese companies are in the final stage of talks with Iraq to win the development contract for Iraq's huge Nassiriya oilfield.
Investors may also actively trade Suzuki Motor after a source familiar with the matter said Volkswagen is exploring a potential cooperation deal with Suzuki as a way to boost its expertise in the area of ultra small cars.
Better-than-expected earnings from U.S. retailer Bed Bath & Beyond helped revive a sense that the recession may be starting to ease.
"The market is going to take heart from this, which will help boost stocks along with expectations that next week's Japanese indicators -- including the Bank of Japan tankan -- will also show signs of recovery," said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.
"Everyone recognises that the market is heading for recovery, and this is likely to be verified when Japanese companies start reporting results next month. The mood is improving."
The benchmark Nikkei on Thursday climbed back above its 25-day moving average after falling below it earlier in the week, and this too is likely to improve sentiment.
Market analysts said the Nikkei is likely to move from 9,700 to 10,000. It closed at 9,796.08 on Thursday.
In a sign the Nikkei is likely to open higher, Nikkei futures traded in Chicago closed at 9,955, 1.7 percent higher than their Osaka close. > Wall St rallies on Bernanke relief, consumer shares > Dollar slides as stocks rise, Swiss franc falls > Jobless claims, successful auctions bolster bonds > Gold rises as oil rallies; volatility declining > Oil surges on Nigeria attack, U.S. refinery problem
STOCKS TO WATCH
-- Bridgestone Corp
Bridgestone, Japan's largest tyre maker, lifted its operating profit forecast for 2009 by 24 percent on Thursday, saying the yen is less strong than it expected.
-- Nippon Electric Glass
The maker of LCD glass lifted its forecast for the first quarter ending in June, expecting a 10 billion yen operating profit, double the top of the forecast range it had given earlier, on an unexpectedly strong recovery in demand.
For the second quarter, it expects operating profit to fall by 55-75 percent from a year-earlier period.
-- Monex Group Inc
Monex, Japan's second-largest online broker by customer accounts, said it was interested in an alliance with Citigroup Inc, which owns a large stake in it, and had been told by the U.S. bank that it had no immediate plans to sell the stake.
-- Kirin Holdings
Kirin said on Thursday it has sold its 3.7 percent stake in France's Pernod Ricard for about 378 million euros ($528.2 million).
-- Fujitsu Ltd
Fujitsu America said it won an outsourcing contract from U.S. data-processing firm Alliance Data Systems Inc with an annual value of more than $40 million. The deal is the first of its kind for Fujitsu in the world's biggest market for information technology services.
-- Lawson Inc
Lawson's group recurring profit likely rose 3 percent from a year earlier to about 12 billion yen for the March-May quarter, boosted by strong sales of low-priced store-brand products and fresh foods, the Nikkei business daily reported on Friday. (Reporting by Elaine Lies; Editing by Edwina Gibbs)