TOKYO, Jan 20 (Reuters) - Japan's Nikkei average is set to move in a tight range on Thursday after weaker-than-expected earnings by U.S. companies sent Wall Street lower, but losses should be limited as bargain hunters buy on dips.
Market players said the benchmark Nikkei may be pushed lower at the start of the trade after Nikkei futures in Chicago closed at 10,485, down 0.8 percent from the close in Osaka, but may quickly recoup its losses.
Traders will also be watching how Chinese markets react to China's official December consumer price index (CPI) and 2010 gross domestic product (GDP) figures released later on Thursday.
Data leaked on Wednesday showed a slowdown in CPI in December, which would reduce the need for aggressive monetary tightening, sending the Shanghai and Hong Kong indexes higher. Hong Kong media reported that consumer prices rose 4.6 percent in the year to December compared with a 5.1 percent pace in November.
"We're also seeing slight signs of overheating in the market, after the Nikkei gained for three consecutive sessions, but bargain hunters will be active today and overall sentiment remains strong," said Hiroichi Nishi, general manager at Nikko Cordial Securities.
Analysts say the benchmark Nikkei is expected to move between 10,450 and 10,550. It gained 0.4 percent on Wednesday.
"But if the market stays strong after announcements from China, the Nikkei could even end up higher again, as buying on dips will limit any potential losses," said Mitsuo Shimizu, deputy general manager at Cosmo Securities.
He said investors' mood is strong ahead of results for Japanese companies to be announced later in the month, as they are expected to show a further recovery in earnings.
Japanese tech firms may take a hit after technology shares were the worst performers on Wall Street on poor results from Cree and other LED lighting makers. ----------------------MARKET SNAPSHOT @ 2303 GMT ------------
LAST PCT CHG NET CHG S&P 500 1281.92 -1.01% -13.100 USD/JPY 82.1 0.17% 0.140 10-YR US TSY YLD 3.337 -- 0.000 SPOT GOLD 1366.55 -0.26% -3.500 US CRUDE 90.7 -0.18% -0.160 DOW JONES 11825.29 -0.11% -12.64 ------------------------------------------------------------- > Banks, tech send Wall St to worst drop in 2 months > Euro hits 8-week high, debt fears fade a bit > Prices rise as deals are priced, Obama, Hu meet > Gold up for 3rd day; silver Eagle sales hit record > Brent above $98 on N.Sea supplies, US crude down
STOCKS TO WATCH:
-- Hino Motors Ltd
The truck maker aims to double production of trucks in Japan to 200,000 per year by 2020, an industry source told Reuters on Thursday.
As part of the plan, the company is considering closing its main factory on the outskirts of Tokyo and shifting production to a new facility in Ibaraki, north of the capital, the source said.
-- Nintendo Co Ltd
A top Nintendo executive said reaction to a health warning on its new 3D handheld game player was overblown, portraying as routine the warning that hit its shares two weeks ago.
-- Sumitomo Mitsui Financial Group Inc.
Sumitomo Mitsui Banking Corp, SMFG's banking arm, plans to increase the capitalisation of its Indonesian unit by the end of the month, following similar moves at its Brazilian and Canadian units last month, the Nikkei business daily reported.
It will raise the capitalisation of the Indonesian unit from 14.1 billion yen ($171.7 million) to 34.1 billion yen, and the move will enable the entity to extend roughly 300 billion yen in loans locally, compared with the 65 billion yen it currently provides, the Nikkei said.
-- KDDI Corp
South Korea's SK Telecom Co and KDDI have submitted first-round bids for Indonesian cable TV and Internet firm First Media which its parent Lippo Group is trying to sell for $400-500 million, sources said.
-- Kyushu Electric Power Co
Kyushu Electric Power has agreed with PT Donggi-Senoro LNG of Indonesia to buy 300,000 tonnes of liquefied natural gas annually for about 13 years, starting in the second half of 2014.
-- Tokyo Steel Manufacturing Co
Tokyo Steel said on Wednesday it expects a second straight year of losses, hurt by a jump in raw materials costs and weak demand in Japan.
-- Shin Etsu Chemical Co Ltd
Shin Etsu is seen to report group pretax profit of slightly more than 120 billion yen for the nine months ended December 31, the Nikkei business daily said on Thursday.
The daily said the firm's sales grew an estimated 20 percent to 800 billion yen in the period. ($1=82.10 Yen) (Reporting by Antoni Slodkowski; Editing by Michael Watson)