* Fanuc soars as special dividend payout offsets forecast cut
* Komatsu jump after co raises profit forecast
By Ayai Tomisawa
TOKYO, Oct 30 (Reuters) - Japan's Nikkei rose on Tuesday morning in choppy trade as investors bought cheaply-valued cyclical stocks and firms raising their annual forecasts, which tempered fresh worries about U.S.-China trade frictions that dragged down U.S. shares.
The Nikkei share average rose 0.9 percent to 21,341.38 in midmorning trade, after opening slightly lower following overnight weakness on Wall Street where big technology and internet shares declined sharply.
U.S. shares fell after Bloomberg reported that the U.S. is planning an additional $257 billion worth of tariffs on Chinese goods if upcoming talks between Presidents Donald Trump and Xi Jinping fail to end the trade war.
"Since global investors are selling growth stocks with high valuations, it's hard to buy Japanese stocks in the same category. In this situation, cheaply-valued cyclical stocks are outperforming," said Norihiro Fujito, a chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
He said domestic long-term investors such as pension funds are seen picking up beaten-down stocks after the value of their stock holdings dropped due to the recent sell-off.
Toyota Motor Corp and Nissan Motor Corp, whose price-earnings ratios are at 8.3 and 7.85, respectively, rose 1 percent each.
Mega banks were in demand, with Mitsubishi UFJ Financial Group and Mizuho Financial Group gaining 1.3 percent and 1.2 percent, respectively. Both banks are trading below their book values.
With first-half Japanese corporate earnings in focus, construction equipment maker Komatsu Ltd surged 5 percent after it raised its full-year operating profit forecast thanks to strong sales in mining equipment in the U.S. and Indonesia.
Factory automation robot maker Fanuc Corp soared 5.5 percent despite a cut in its profit forecast as the company's decision to pay special dividends offset the negative news.
The broader Topix rose 0.8 percent to 1,602.30. (Editing by Shri Navaratnam)