TOKYO, Sep 19 Japanese stocks are likely to open higher on Wednesday, led by a rebound in

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TOKYO, Sep 19 (Reuters) Japanese stocks are likely to open higher on Wednesday, led by a rebound in Mizuho Financial Group Inc and other financials, following a rally on Wall Street on the Fed's bold rate cut.

One of the stocks likely to grab the market's attention is Cosmo Oil Co An investment arm of the Abu Dhabi government will spend about $776 million to buy one-fifth of Cosmo Oil, becoming the top shareholder in Japan's fourth-largest oil company.

"The market is likely to see a big rebound today, led by financials that were sold yesterday," said Masayoshi Yano, senior manager of investment information at Tokai Tokyo Securities.

"Investors are reacting very positively to the Fed's decision to cut rates by 0.5 percentage points," he said, adding the market also found comfort in better-than-expected earnings by Lehman Brothers The cut in the Fed's benchmark short-term rate, the first in four years, was more aggressive than many investors had expected, giving U.S. stocks the biggest rise in four years on Tuesday.

The Dow Jones industrial average rose 2.5 percent, the Standard&Poor's 500 Index jumped 2.9 percent and the tech-heavy Nasdaq Composite Index climbed 2.7 percent.

Later on Wednesday the Bank of Japan ends a two-day policy meeting at which it is widely expected to keep its overnight rate unchanged at 0.5 percent.

Market participants are waiting for BOJ Governor Toshihiko Fukui's comments after the meeting for clues on rate hikes in the near future.

Analysts predict Tokyo's benchmark Nikkei average will move between 16,000 and 16,500 on Wednesday after shedding 2.0 percent in Tuesday's session to 15,801.80.

Nikkei futures traded in Chicago finished at 16,300 on Tuesday, 520 higher than Osaka close, indicating higher opening in Tokyo.

The dollar was around 115.80 yen against 116.14 yen in late New York trade.

STOCKS TO WATCH -- Mitsubishi Heavy Industries T> Mitsubishi Heavy plans to enter the market for power plant facilities in Russia through an alliance with conglomerate Renova Group, the Nikkei business daily reported on Wednesday.

-- Sony Corp T> Sony Corp's financial arm cut the price of its initial public offering to 348 billion yen ($3 billion) on Tuesday to better reflect a weaker appetite for financial shares in the wake of problems in the U.S. subprime mortgage sector.

Sony Financial Holdings, which oversees the group's online banking and insurance businesses, set a price range of 380,000 to 400,000 yen per share for its Oct. 11 IPO, compared with an assumed price of 415,000 yen cited earlier this month.

-- Seiyu Ltd T> Seiyu, the Japanese unit of Wal-Mart Stores Inc, boosted its annual loss forecast by 76 percent due to a charge to cut about 7 percent of its work force as it battles sluggish sales.

-- Mitsubishi Motors Corp T> Mitsubishi Motors said on Tuesday it would transfer the production of its Outlander car for the European market to the Netherlands due to strong demand and to free up production capacity in Japan.


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