Capital alliance talk boosts Sharp TOKYO, Sept 21 (Reuters) Japan's Nikkei average edged up on Friday, rebounding from a sharp drop in the previous session as investors took comfort from steadiness in US stocks, shrugging off fears over soft manufacturing data from China, Europe and the United States. Embattled TV maker Sharp Corp gained 5 percent on short-covering after the Mainichi newspaper said it was in talks with US chipmaker Intel Corp on a capital alliance that would offer a possible lifeline to the company as discussions with Taiwan's Hon Hai Precision Industry Co Ltd stall. Gains in Japan Tobacco Inc, up 2.9 percent after rival Imperial Tobacco rose 2.7 percent overnight following a reassuring trading update, also supported the market. The Nikkei advanced 0.3 percent to 9,110.00 after shedding 1.6 percent on Thursday in a move that wiped out gains made after the Bank of Japan eased monetary policy on Wednesday. The benchmark ended 0.5 percent down on the week, marking its first weekly loss in three weeks. "We're not seeing big gains from the BOJ's easing because we need to see that the BoJ is really committed to weakening the yen and fighting deflation," said Takashi Oba, senior strategist of Okasan Securities. Even though they increased their asset buying by Y10tn, it still looks like peanuts in comparison to the Fed's easing programme. The broader Topix index gained 0.3 percent to 756.38 in moderate trade. It ended 0.1 percent down on the week. Optimism around Japan Airlines Co Ltd "s public offering on Wednesday turned sour as the stock lost 4.3 percent, falling 3 percent below its initial price, after the company said it would reduce its October flights to China and the Nikkei paper said customers had already cancelled 12,000 flights. One trader said the stock, which was the most-traded on the main board by turnover, was also being sold off as it had reached its foreign ownership limit of 33 percent.