TOKYO, Oct 13 (Reuters) - Japan's Nikkei average is likely to open higher on Wednesday as investors are expected to cover short positions after the benchmark lost more than 2 percent the previous day, but active buying will be limited by the yen's strength.
The Nikkei should receive a boost after U.S. stocks hit fresh 5-month highs on Tuesday when minutes from the Federal Reserve's latest meeting showed members felt further monetary easing could be appropriate before long.
"The Nikkei should open higher after the Dow Jones industrial average edged up in the last three sessions," said Kazuhiro Takahashi, general manager at Daiwa Capital Markets.
"It will be supported by short-covering as yesterday's falls were a bit overdone," Takahashi said.
On Tuesday, the Nikkei average fell 2.1 percent, knocked to its biggest daily loss in a month by persistent strength in the yen and by a surprisingly weak profit forecast from popular stock Fast Retailing.
Market players say they expect the Nikkei to move between 9,350 and 9,500.
In early Asia trade, the dollar rose 0.1 percent to 81.81 yen. It hit a 15-year low of 81.37 on Monday.
Nikkei futures traded in Chicago closed at 9,475, slightly higher from the Osaka close.
The Nikkei has fallen below the closely watched 25-day moving average of 9,424 and the 75-day average of 9,392.
But traders said the technical trend has not turned weak and the Nikkei could still test recent peaks around 9,700 hit this month and 9,800 hit in July.
STOCKS TO WATCH
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-- DeNA Co
DeNA will buy ngmoco Inc, a U.S. developer of games for Apple Inc's iPhone and iPad for up to $403 million, saying the combination will create the world's largest mobile social games platform company.
-- Sony
Sony Corp is making its biggest push yet into so-called connected televisions, unveiling a line of Google-enhanced sets that aim to fuse TV and Web content together in the living room.
-- Toyota
The U.S. government expects to meet its late-year deadline for determining whether throttles or other electronic systems could be linked to unintended acceleration in Toyota Motor Corp vehicles, a senior safety investigator said on Tuesday.