TOKYO, Nov 15 (Reuters) - Japan's Nikkei average is expected to come under downward pressure on Monday, reflecting falls in U.S. shares and increasing concerns over over possible monetary tightening in China to curb inflation.
Rekindling jitters about debt problems of some euro zone countries, including Ireland, could also make investors hesitant about building new buy positions.
Still, the Nikkei is expected to find support due to recent falls in the yen against the dollar.
"The market is nervous about extending purchases in the Nikkei as last week's rallies were a bit too rapid. We may see some more profit-taking, reflecting falls in overseas markets," said Hiroichi Nishi, general manager at Nikko Cordial Securities.
"But the Nikkei's fall will be limited by bargain-hunting as we see ample liquidity in global markets," Nishi said.
Nikkei futures traded in Chicago closed at 9,740, down 0.2 percent from the Osaka close of 9,760.
The benchmark Nikkei is likely to move between 9,600 and 9,800 on Monday, traders said.
Investors will watch shares in the Shanghai and Hong Kong markets as a clue to direction in the Tokyo market.
On Friday, the Nikkei fell 1.4 percent to 9,724.81 from a 4-½ month closing high marked the day before.
Wall Street ended a five-week winning steak on Friday as the chance of rising interest rates in China prompted investors to book profits and reassess bullish positions in equities.
Technical sentiment for the Nikkei stayed healthy but the market could be in a slight consolidation mode after the Nikkei reached an intraday peak on Thursday of 9,885.37, the highest since June 24.
Technical resistance is seen around the intraday high and more resistance at the 200-day moving average of 9,930.
Bargain-hunting interest will grow should the Nikkei dip below 9,600.
The Nikkei is expected to be supported as the dollar was solid against the yen.
In early Asian trade, the dollar was little changed at 82.50 yen. ----------------------MARKET SNAPSHOT @ 2307 GMT ------------
LAST PCT CHG NET CHG S&P 500 1199.21 -1.18% -14.330 USD/JPY 82.47 0.04% 0.030 10-YR US TSY YLD 2.7853 -- 0.000 SPOT GOLD 1369.91 0.26% 3.560 US CRUDE 84.85 -0.04% -0.030 DOW JONES 11192.58 -0.80% -90.52 ------------------------------------------------------------- > Wall St slips on China inflation worries; fear rises > Euro to remain under pressure as uncertainty reigns > Bond prices fall as recovery contemplated > Gold falls most since July on commodities rout > Oil tumbles on China rate, euro zone concerns
STOCKS TO WATCH
-- Mizuho and Sumitomo Mitsui
Mizuho and SMFG's bigger-than-expected hikes in profit forecasts on Friday failed to ease investor concerns about the Japanese banks' longer-term prospects after bond trading gains drove stellar quarterly profits.
-- Nomura Holdings
Nomura, Japan's biggest brokerage, has a very high chance of showing a net profit this financial year, its chairman said, despite a stock market slump that drove second-quarter net nearly to zero.
-- Sharp Corp
Sharp, a Japanese electronics maker, will start selling mobile phones in India next month, the Nikkei business daily reported on Saturday.
India's mobile phone market is expected to grow as the nation had more than 200 million new users in the past year, while only 50 percent of the population use mobile phones, the newspaper said.
-- Hitachi Ltd
The Japanese government is considering giving financial support for Hitachi's bid to win a high-speed railway project order in Britain, the Nikkei reported.
The Japanese government would provide a loan through the Japan Bank for International Cooperation to a railcar-leasing company that Hitachi plans to establish with a leading British general contractor, the daily said. (Reporting by Chikafumi Hodo; Editing by Michael Watson)