TOKYO, Sept 1 (Reuters) - Japan's Nikkei average is likely to fall on Tuesday, with exporters such as Advantest Corp hurt by a stronger yen and as worries about the global economy's health grew after a plunge in Chinese equities.
China shares dived 6.7 percent on Monday and recorded their second-biggest monthly loss in 15 years, after surging stock valuations overwhelmed improvements in corporate earnings. That spooked investors globally and helped sent the S&P 500 Index down 0.8 percent.
"The market has become more prone to being driven by moves in futures due to worries about a fall in other Asian markets and a stronger yen," said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.
"The election result came in as expected and the focus is now on who will be appointed to the new cabinet and what kinds of policies it will pursue."
Sunday's landslide victory for Yukio Hatoyama's opposition Democrats ends a half-century of almost unbroken rule by the Liberal Democratic Party in Japan and breaks a deadlock in parliament.
Nikkei futures traded in Chicago closed at 10,465 on Monday, almost unchanged from the Osaka close.
Market participants expect the benchmark Nikkei to move between 10,350 and 10,600 on Tuesday.
It fell 0.4 percent in choppy trade the previous day to 10,492.53. It hit an 11-month high at 10,767.00 at one stage as the market struggled to interpret the results of the election.
In early Asian trade, the dollar slipped 0.2 percent to 92.97 yen. The yen received a boost after the election result sparked hopes that new policies will support consumer spending in an economy trapped in deflation and haunted by a weak growth outlook.
But investors fret about a stronger yen as it curbs exporters' profits when they are repatriated.
STOCKS TO WATCH
-- Sony Corp
Sony said on Tuesday it has agreed with Taiwan's Hon Hai Precision Industry on a tie-up in liquid crystal display TV production in the Americas.
-- Sharp Corp
Sharp said on Monday it would set up a venture with China Electronics Corp (CEC) to make LCD TV panels from 8th-generation glass substrates in Nanjing to meet growing demand in China.
-- Panasonic Corp, Sanyo Electric Co Ltd
Panasonic said on Monday it was still waiting on approval from four anti-trust regulators for its planned acquisition of Sanyo Electric.
-- Hitachi Construction Machinery Co
Japanese excavator maker Hitachi Construction said on Monday that it would make forklift maker TCM Corp a wholly owned subsidiary through a share swap. (Reporting by Aiko Hayashi; Editing by Chris Gallagher)