TOKYO, Jan 26 (Reuters) - Japan's Nikkei average is expected to fall on Wednesday after U.S. shares showed little change and a surprise contraction in Britain's economy and an Indian interest rate hike fuelled concerns about economic growth and the effect of rising commodity costs.
Market players await a statement by the Federal Reserve, which concludes a two-day policy meeting on Wednesday. A pledge by the Fed to continue its $600 billion bond-buying plan could bolster shares on hopes for continued liquidity, traders said.
A statement will be released at around 1915 GMT on Wednesday.
"The Nikkei has gained a lot over the last two days so we can expect it to be a shade weaker today, especially after a mixed performance on Wall Street," said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.
Nikkei futures in Chicago closed at 10,470, down 0.2 percent from the close in Osaka.
Market participants said there was cautious optimism ahead of earnings announcements by major Japanese companies this week but it would be the actual results and company guidance about long-term growth potential that would decide whether the benchmark made further substantial gains.
"Hopes for strong earnings are still there and we will see a lot of movement in the next two weeks in individual shares," said Takahashi.
Exporters including Canon Inc and Kyocera Corp as well as Japan's biggest personal computer firm, NEC Corp, are due to report this week, setting the tone for the October-December earnings season that will last until early February.
Analysts say the benchmark Nikkei is expected to move between 10,200 and 10,400. It gained over 1.2 percent on Tuesday, breaching two crucial resistance levels, its closely watched 25-day moving average, now at 10,404 and then 10,420, where December futures and options prices settled.
A late burst of buying lifted the main Wall Street indices and they closed little changed after spending most of the day in negative territory following poor earnings reports from blue chips 3M and Johnson & Johnson.
Resource stocks may take a hit after commodity markets felt pressure from concern that monetary tightening in India and China could continue as raw materials and food costs rise. The 19-commodity Reuters Jefferies CRB index fell more than 1 percent, heading for its largest one-day loss since Jan. 6. ----------------------MARKET SNAPSHOT @ 2209 GMT ------------
LAST PCT CHG NET CHG S&P 500 1291.18 0.03% 0.340 USD/JPY 82.2 -0% 0.000 10-YR US TSY YLD 3.3303 -- -0.074 SPOT GOLD 1331.95 -0.06% -0.800 US CRUDE 86.23 -1.87% -1.640 DOW JONES 11977.19 -0.03% -3.33 ------------------------------------------------------------- > Wall St ends flat in late flurry of buying > Euro rises versus dollar, more gains expected > Prices rise on talk of US budget freeze > Gold falls for 4th day as investor sentiment fades > US crude losses at near 2 pct after API stock build
STOCKS TO WATCH:
-- Ricoh Co
Oki Data Corp did not violate Ricoh Co patents in making its multifunction devices that print and scan, the U.S. International Trade Commission said on Tuesday.
-- Eisai Ltd
In a significant setback, Eisai has put on hold plans to seek approval for its sepsis medication after a late-stage trial showed no reduction in mortality rates compared to a placebo.
-- Nidec Corp
Japanese motor maker Nidec is seeking to buy a business making motors for auto use, the company's president and founder said on Tuesday after announcing quarterly results.
-- Sumitomo Trust & Banking Co
Sumitomo Trust Finance (H.K.) Ltd, the asset management arm of Sumitomo Trust & Banking, has liquidated its Tactical Equity Concepts Japan hedge fund, according to a document obtained by Reuters.
-- Nissan Motor Co
Nissan said on Tuesday it would add overtime at one if its Japanese factories towards the end of the business year in March to bring production of the Leaf electric car up to full speed.
-- Komatsu Ltd
Construction machinery maker Komatsu is expected to log a consolidated operating profit of about 220 billion yen ($2.68 billion) for the business year to March 31, up roughly 230 percent from the previous year, partly on brisk sales of construction machinery in China, the Nikkei business daily reported on Wednesday.
That would surpass the company's previous projection by about 20 billion yen, the daily said adding that overall sales will likely exceed a prior forecast calling for a 23 percent jump to 1.76 trillion yen with unit sales in China during the October-December quarter believed to have jumped 30-40 percent on the year, the Nikkei said.
-- KDDI Corp.
KDDI is teaming up with 52 FM radio broadcasters to stream programming via the Internet to its smartphone and cellular phone customers, the Nikkei business daily said.
The Lismo Wave service will be launched on Wednesday, giving listeners access to radio programming from stations nationwide for a monthly fee of 315 yen, the paper said.
-- Yahoo Japan Corp.
Yahoo Japan said on Tuesday its net profit for the October-December quarter rose 18 percent from a year earlier on improved online advertising sales.
It also said it would pay a year-end dividend ranging from 313 yen to 319 yen per share, up from 288 yen paid in the previous year and added that its planned search technology tie-up with Google Inc is moving ahead smoothly. ($1=82.22 Yen) (Reporting by Antoni Slodkowski; Editing by Michael Watson)