TOKYO, Oct 7 (Reuters) - Japan's Nikkei average is expected to maintain its uptrend seen over the last two days after a series of monetary easing measures taken by the Bank of Japan, but its topside is expected to be weighed down by the strength of the yen.
The market will closely watch moves in the yen, which jumped to a new 15-year high against the dollar the previous day on expectations the Federal Reserve will ease monetary policy to jump start a slumping U.S. economy.
"The effect of the BOJ easing is still in place, which should keep the Nikkei supported today. Inflows into the real estate sector are expected to continue," said Kazuhiro Takahashi, general manager at Daiwa Capital Markets.
"But the the yen's strength is worrying. The market is also not expecting Japanese authorities to intervene before the Group of Seven nations meeting. The Nikkei could be placed under selling pressure if the yen firms," Takahashi continued.
Nikkei futures traded in Chicago closed at 9,705.00, little changed from the Osaka close.
The benchmark Nikkei is likely to move between 9,500 and 9,750, traders said.
The Nikkei gained more than 3 percent over the last two sessions after the BOJ pledged on Tuesday that it would pump more funds into the struggling economy and to keep rates virtually at zero.
Shares prices in the property sector jumped after the BOJ announced a plan to set up a 5 trillion yen ($60 billion) fund to buy a wide range of assets, including Japanese real estate investment trust (J-REITs).
Technical trends looked strong after clearly breaking through key levels, including 9,530 at the upper end of the closely watched Ichimoku chart.
No clear technical resistance is seen until the 200-day moving average at around 10,066, but traders are watching 9,704 -- an intraday high reached on Sept 21 -- as a key chart point.
A break above 9,807 -- another intraday high hit on July 14 -- would pave the way for the Nikkei to rise towards 10,000, traders said.
Traders are focusing on the outcome of the G7 meeting later to determine the trend of the dollar/yen rate.
Investors are also closely watching Friday's U.S. non-farm payrolls data to judge whether the Federal Reserve would resume quantitative easing as soon as its next policy-making meeting scheduled on Nov. 2 and 3.
On Wednesday, a private-sector report from payrolls processor ADP suggested the U.S. labour market remained anemic in September, kicking of a slew of dollar-selling across the board.
STOCKS TO WATCH
-- Aeon Co Ltd
Aeon, Japan's second-largest retailer, raised its full-year forecast above market expectations after bumper summer sales and cost-cutting drove a 50 percent surge in quarterly profit.
-- Fujitsu Ltd
Fujitsu, Japan's biggest IT services provider, is expected to raise 50 billion yen by issuing straight bonds as early as this month, the Nikkei daily said.
The offering is most likely to consist of 20 billion yen in three-year notes and 30 billion yen in five-year bonds, the daily said.
-- Mazda Motor Corp
Mazda will devote a larger proportion of R&D funding to the development of hybrids and other environmentally friendly vehicles, raising the ratio from just above 20 percent in fiscal 2010 to about 40 percent in fiscal 2015, the Nikkei business daily said.
In the current fiscal year, the carmaker earmarked 100 billion yen for group R&D spending, up 15 billion yen from fiscal 2009, of which slightly more than 20 percent will go toward developing green cars, the paper said. (Reporting by Chikafumi Hodo; Editing by Joseph Radford)