Nikkei ends 4-day losing run; Canon, Nidec suffer

* Weaker yen drives shares in Toyota, Honda, Nissan higher

* Canon, Nidec sag after Hewlett-Packard warns on outlook

By Dominic Lau

TOKYO, Oct 4 (Reuters) - Japan's Nikkei share averagesnapped a four-session losing streak on Thursday as sentimentwas boosted by a strong showing by the pro-business U.S.Republican candidate, Mitt Romney, in his first debate withPresident Barack Obama, dealers said.

"There is a certain school of people that have particularviews on which candidate is better for the markets, specificallyfor the dollar ... It's probably an initial gut reaction to thepresidential debate," a dealer at a European brokerage said.

A CNN/ORC snap poll said 67 percent of registered voterssurveyed thought Romney won the debate at the University ofDenver, compared with 25 percent for Obama.

The Nikkei

advanced 0.9 percent to 8,824.59, butfaced resistance at its 75-day moving average at 8,871.78, whileU.S. S&P futures

rose 0.4 percent.

"It is really about the currency. Our currency guys aresaying that some macro funds started buying risky currenciespost the debate ... so who knows," said a senior trader at aU.S. bank. "I think the market is just looking for an excuse togo higher."

A weaker yen, which was quoted at 78.60 yen to the dollarafter hitting a two-week low of 78.72, improved the appeal ofJapanese exporters. Toyota Motor Corp

gained 3 percent,Nissan Motor Co

surged 5.1 percent and Honda Motor Co

climbed 3.1 percent.

The automakers have been battered lately on concerns oversputtering global growth and sluggish demand from China amidrising anti-Japanese sentiment over a territorial dispute.

"Although the Big Three all strike us as undervalued from amedium-term perspective, our preference over the next threemonths is for Honda Motor, followed by Toyota Motor, followed byNissan Motor," Nomura said in a note.

The benchmark Nikkei is up 4.4 percent so far this year,trailing a 15.4 percent rise in the S&P 500

and a 11percent gain in the pan-European STOXX Europe 600

index.

Another trader at a European bank said there was a buyprogramme going into the morning session, which also helped pushthe index higher.

But Canon Incdropped 2.2 percent on Thursday afterits client Hewlett-Packard

warned of an unexpectedlysteep earnings slide in 2013, with revenue set to fall in everybusiness division except software.

Nidec Corp

sagged 4.4 percent after J.P. Morgancut its rating on the maker of precision motors to 'neutral'from 'overweight' and on the back of Hewlett-Packard's outlookwarning.

Other noticeable losers included Nikon Corp

, whichshed 3.6 percent after the Nikkei business daily said itsinterim operating profit would drop 43 percent on the year to 35billion yen ($445.69 million), signalling a slowdown in sales.

TECH OUTLOOK

"Investors are backing out of tech shares, where profits arelooking weaker and weaker," said Yasuo Sakuma, portfolio managerat Bayview Asset Management. "After companies went ex-dividendat the end of September there are precious few reasons to buy."

The latest quarterly earnings season will move into highgear in the next two to three weeks. Investors were disappointedwith the previous quarterly earnings, when 54 percent of Nikkeicompanies reported results below analysts' expectations.

For this quarter's results, SmartEstimates from ThomsonReuters StarMine expects an average negative earnings surpriseof 1.2 percent.

The broader Topix

rose 1.1 percent to 735,38, withnearly 1.64 billion shares changing hands, up from Wednesday's1.4 billion and last week's average of 1.6 billion.

Market consensus is mixed over whether the Bank of Japanwill ease monetary policy further after it concludes a two-daymeeting on Friday, as it may be reluctant to expand its balancesheet after swelling it by 10 trillion yen last month, althoughits latest survey showed increasing pessimism about the domesticeconomy.

However, in the latest sign that the U.S. economy is gettingback on its feet, data showed growth in the country's servicesector in September, contrary to economists' expectations of aslight decrease. The private sector also added more jobs thananticipated last month, which bodes well, ahead of Friday'snonfarm payrolls data.

($1 = 78.5300 Japanese yen)

(Additional reporting by Sophie Knight; Editing by SanjeevMiglani)

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Keywords: MARKETS JAPAN STOCKS/