TOKYO, Oct 26 (Reuters) - Japan's Nikkei average is expected to be weighed down by the strength of the yen on Tuesday, but investors will be reluctant to trade heavily as Japanese companies are heading into the peak of their earnings reporting this week.
The market will be careful about taking fresh long positions as the yen firmed to 80.41 against the dollar on trading platform EBS on Monday, a 15-year high and within reach of its record high of 79.75 yen.
"The yen's strength will weigh on the Nikkei. Trading is expected to be nervous and the Nikkei is seen rangebound in the midst of the corporate earnings season," said Kazuhiro Takahashi, general manager at Daiwa Capital Markets.
"But the Nikkei's fall will be limited as we are expecting to see good results, with many firms expected to revise up their forecasts," Takahashi said.
A slew of major companies report this week including Canon Inc on Wednesday and Sony Corp on Friday.
Nikkei futures traded in Chicago closed at 9,400, down 0.3 percent from the Osaka close of 9,430.
The benchmark Nikkei is expected to move between 9,350 and 9,500 after closing down 0.3 percent at 9,401.16 on Monday, traders said.
U.S. stocks rose to a five-and-a-half month high on Monday as a falling dollar, partly driven by expectations of further stimulus by the Federal Reserve, prompted investors to buy riskier assets.
"The Nikkei is expected to start near the previous close, but after that the market will move in line with dollar/yen," said a trader at a major Japanese brokerage.
The dollar was little changed at 81.80 yen in early Asian trade.
The Nikkei is expected to find solid support at its 75-day moving average, now at 9,389. It is also expected to be supported at last week's intraday lows of around 9,310-9,320.
Some resistance is seen at the 25-day average, now at 9,502. ----------------------MARKET SNAPSHOT @ 2302 GMT ------------
LAST PCT CHG NET CHG S&P 500 1185.62 0.21% 2.540 USD/JPY 80.82 0.07% 0.060 10-YR US TSY YLD 2.5668 -- 0.000 SPOT GOLD 1339.59 0.12% 1.590 US CRUDE 82.19 -0.40% -0.330 DOW JONES 11164.05 0.28% 31.49 ------------------------------------------------------------- > Wall St advances on dollar weakness, Fed bets > Dollar weakens broadly as Fed trumps G20 > Long bonds gain on expected Fed buying > Gold rises on dollar drop after G20, palladium up > Oil rises on weak dollar, expected easing
STOCKS TO WATCH
--NSK Ltd
NSK, the world's second-largest manufacturer of electronic power steering systems, has formed a joint venture with Toshiba Corp to develop electronic power steering systems to hit the market in 2013, the Nikkei business daily reported.
-- Toshiba Corp
Japanese electronics conglomerate Toshiba is stepping up its expansion of overseas production and procurement to withstand a further rise in the yen as far as 70 to the dollar, its chief executive said on Monday.
-- Marubeni Corp
Marubeni said on Monday it has agreed to pay $650 million for the stakes held by a unit of BP in four oil and gas wells in the U.S. Gulf of Mexico, as the British oil company looks to offload assets in the wake of a massive oil spill in the region.
-- Toyota Motor Corp
Toyota plans to establish a new firm in mid-December in Egypt to produce fortuner sport utility vehicles, the Nikkei financial daily reported on Tuesday.
-- GS Yuasa Corp
GS Yuasa, Japan's top car battery maker, raised its net profit estimate for April-September period to 2.5 billion yen ($30.94 million) from 1.5 billion yen citing a strong performance by subsidiaries overseas.
The company also doubled its operating profit outlook for the period to 6 billion yen, saying the hottest summer on record and a jump in eco-car sales before the support scheme ended had boosted its domestic earnings.
-- Sony Corp
Sony said on Monday it would cut the price of its PSPgo portable game player in the United States and Japan this month as game makers enter the crucial year-end shopping period. (Reporting by Chikafumi Hodo; Editing by Michael Watson)