Nikkei rises on hopes for strong capital spending

TOKYO, Apr 2 (Reuters) The Nikkei share average rose 0.34 percent on Monday with Honda Motor Co. Ltd. advancing after a business survey showed that large manufacturers' capital spending plans for the new business year are greater than the market originally expected.

Shares of Nikon Corp. gained more than 3 percent after a newspaper reported the maker of cameras and chip equipment would beat its own forecast for the year to March and post record earnings.

Japan's large manufacturers expect their capital spending to rise 2.9 percent in the business year that just started, the Bank of Japan's quarterly tankan survey of business confidence showed on Monday. That compared with the market's median forecast for a 1.7 percent rise.

''After the shocks in the Chinese market and the world stock sell-off, there were expectations that (capital spending) plans would be be very cautious,'' said Katsuhiko Kodama, senior strategist at Toyo Securities.

''The market is responding positively to the better-than-expected results.'' The Nikkei was up 63.15 points at 17,350.80 as of 0110 GMT.

The broad TOPIX index was up 0.11 percent at 1,715.42.

Shares of Honda Motor gained 1.2 percent to 4,160 yen, becoming the biggest contributor to the Nikkei's rise.

Kyocera Corp., the maker or electronic components, gained 1.6 percent to 11,290 yen.

Shares of Nikon rose 3.2 percent to 2,565 yen.

The company will likely post a record 53 billion yen (0 million) in group net profit for the year ended March 31, up 83 percent from the year before and 2 billion yen above its own forecast, the Nikkei business daily said on Saturday.

REUTERS SBA BST0725