Nikkei set to rise, supported by weaker yen

TOKYO, June 25 (Reuters) - Japan's Nikkei share average is
expected to open higher on Monday, tracking gains in Wall Street
and as exporters benefit from a softening in the yen on the back
of improving funding for European banks.

The Nikkei was likely to trade between 8,750 and
8,900, strategists said, after Nikkei futures in Chicago
<0#NIY:> closed at 8,830 on Friday, up 0.6 percent from the
Osaka close.

"Trading will likely be rangebound today, though a weaker
yen will give the market some support," said Hiroichi Nishi,
general manager of equity division at SMBC Nikko Securities.

U.S. stocks ended higher on Friday, led by gains in bank
shares, as the S&P 500 index bounced back from its second-worst
decline of the year.

On Friday, the Nikkei eased 0.3 percent to 8,798.35, but
ended up 2.7 percent on the week, its best weekly gain in four
months. The broader Topix index slipped 0.4 percent to
750.92.

The European Central Bank is to start accepting a wider
range of collateral in its lending operations and assets of a
lower quality, easing funding pressures on struggling banks.

The 30-day implied volatility for the Nikkei eased to 17.7
percent on Friday to hit a seven-week low, indicating an easing
of investors' concerns over the euro zone crisis and slowing
global growth, data from Thomson Reuters Datastream showed.

That compared with the U.S. S&P 500 15.7 percent and
Euro STOXX 50's 23 percent, its lowest since April
9.

> Wall St claws back after sharp decline, banks lead
> Euro gains after ECB loosens lending rules
> Treasuries fall ahead of supply, EU summit
> Gold posts 3.5 pct weekly drop on deflation fear
> Oil near $91, up from 18-mth low; as Gulf storm builds

STOCKS TO WATCH

-- RENESAS ELECTRONICS CORP

Japan's struggling Renesas plans to start capital raising
talks with KKR, including issuing about 50 billion yen
($620 million) in new shares to the U.S. investment firm, Nikkei
business daily reported on Saturday.

-- SONY CORP

Sony will invest 80 billion yen ($1 billion) in its plant in
Nagasaki, western Japan, to increase production capacity of CMOS
image sensors used in smart phones.

-- ASTELLAS PHARMA INC

Astellas Pharma has received approval for additional use of
its Symbicort Turbuhaler drug treatment for adult bronchial
asthma in Japan beyond its current twice-daily usage limit.

-- TOYOTA MOTOR CORP

Bayerische Motoren Werke (BMW) and Toyota Motor
Corp are planning to expand cooperation beyond green
car technology and diesel engines, Der Spiegel magazine reported
on Sunday, without citing any sources.

-- OSAKA GAS

Osaka Gas, Japan's second biggest supplier of city gas, will
pay $249 million for a stake of 35 percent in a Texas shale gas
and oil project run by Cabot Oil & Gas Corp, aiming to
boost investment returns from the potentially lucrative upstream
business.

--SUMITOMO CORP

Sumitomo Corp said on Friday it will sell a 50 percent stake
in its Jupiter Shop Channel unit to U.S. investment fund Bain
Capital Group.

(Reporting by Dominic Lau and Lisa Twaronite; Editing by John
Mair)