Japan's Nikkei stock average is set to rise on Wednesday after reports of an aid plan for heavily indebted Greece relieved worries about global economic stability, while a weaker yen is likely to support exporters.

Toyota Motor Corp will continue to be in focus after the automaker said on Tuesday it would recall thousands of Camry sedans as well as nearly half a million new Prius and other hybrid cars to fix steering and braking problems.

U.S.-listed shares of Toyota rose 2.6 percent. Honda Motor Co is also likely to draw attention after it announced an expanded recall in the United States for an

airbag defect that will affect an additional 379,000 vehicles.

A senior German ruling coalition source said euro zone governments have decided in principle to help Greece, calming investors.

Risk aversion increased in the past two weeks on concerns about the fiscal stability of Greece, Portugal and Spain.

"With worries linked to Greece having eased and the yen a bit weaker, the Nikkei is likely to recover to above the 10,000 level, just as the Dow did," said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.

He also said that technical indicators showed the Nikkei was in a buying zone. Its relative strength index (RSI) stood at 35 on Tuesday, with a level of 30 or below seen as oversold territory.

The dollar had edged up 0.2 percent against the yen to 89.81 yen, while the euro rose 0.2 percent against the yen to 123.82 yen.

Machinery orders data, a leading indicator of capital expenditure, are due out just before the open. Core machinery orders in December probably rose 8.0 percent from the previous month, according to the median estimate from a Reuters poll of 33

economists.

The benchmark Nikkei is likely to move between 9,950 to 10,100, market players said. It closed at 9,932.90 on Tuesday.

In a sign the market is likely to open higher, Nikkei futures traded in Chicago closed at 10,040, up 1 percent from the Osaka close .