Nikkei set to snap 5-day losing streak; Sharp falls

* Receding yen strength provides index support

* Automakers, financials rebound

* Sharp down on report to post bigger net loss

By Dominic Lau

TOKYO, April 10 (Reuters) - Japan's Nikkei average rose on
Tuesday, on track to end a five-session losing run, ahead of
trade data from China and a Bank of Japan policy meeting, with
the yen coming off a one-month high against the dollar hit the
pervious day.

The softer yen, after strengthening on the back of Friday's
disappointing U.S. jobs data, gave exporter shares some
breathing space and helped lift the index higher.

By the midday break, the Nikkei advanced 0.8 percent
to 9,620.24 after shedding more than 5 percent in the previous
five sessions and hitting the lowest closing level since Feb. 21
on Monday.

Exporters were in demand, with Toyota Motor Corp,
Honda Motor Co, Nissan Motor Co and TDK Corp
up between 1.6 and 2.9 percent.

Sharp Corp sagged 3.4 percent to 535 yen, below its
25-day moving average, after a Nikkei report said the
electronics maker was expected to post a bigger net loss for the
2011 fiscal year than previously projected, hurt by poor sales
of televisions and solar cells.

"The overall feedback from long-term investors is that there
is no long-term story in place which can justify taking a two-to
three-year position on Sharp," a dealer at a foreign bank said.

But it would be "a perfect day to pick up a little position"
for short-term players, he said.

The trader added that many investors were on the sidelines
before the Chinese data and BOJ meeting, though some were on the
prowl for beaten-down stocks or cutting positions in stocks that
have outpaced the broader market this year.

SHORT AUTO SECTOR

The auto sector outperformed the broader market but Nomura
recommended investors short the sector, citing a halt in yen
weakness.

"With the market's risk-on sentiment fading, we think
high-beta sectors including automobiles and transport equipment
could see spreading profit-taking in the near term," it said in
a report.

"Although sector valuations continue to look relatively low,
we have lowered our stance on the sector to short in view of a
halt in yen depreciation, with which sector performance is
closely correlated, and of signs from a technical perspective
that the sector could soon enter a correction phase."

The transport equipment sub-index, home to Toyota
and Nissan, rallied 32 percent in January-March, outperforming a
19.3 percent rise in the Nikkei, although it is down 4.7 percent
since the start of April.

The broader Topix index was up 0.8 percent at 820.34
on Tuesday. Trading volume on the main broad was light after the
halfway point, at 45 percent of its full daily average for the
past 90 days.

The BOJ is largely expected to refrain from easing monetary
policy, holding fire until a more thorough assessment of the
economy two weeks later, which may show further action is needed
to nudge inflation up towards its 1 percent goal. The central
bank will hold another meeting on April 27.

Financials also bounced, with Mitsubishi UFJ Financial Group
Inc up 1.8 percent. Japan's top investment bank Nomura
Holdings Inc climbed 2.9 percent, boosted by a target
price increase by Bank of America Merrill Lynch.

(Additional reporting by Mari Saito; Editing by Jonathan
Hopfner)