TOKYO, Dec 10 (Reuters) - Japan's Nikkei average is expected to move in a tight range on Friday after hitting a seven-month high the previous day, with profit-taking likely to emerge after the index gained over 12 percent since the beginning of November.
Short-term technical indicators are showing signs of overheating in the market, although some long-term positive indicators, such as the "golden cross," in which the Nikkei's 25-day moving average surpassed the 200-day moving average, suggest it will maintain its recent pace of gains.
"The Nikkei may open a bit lower after rising so much recently and as futures (in Chicago) ended lower yesterday, then it will likely move in tight range for the rest of the day," said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.
Nikkei futures in Chicago closed at 10,250, down from the Osaka close of 10,270.
"But sentiment is strong and volume has picked up recently so there are plenty of factors to support stocks today," Nishi said.
The benchmark Nikkei is expected to move in a range of 10,200 to 10,350, analysts said, after rising 0.5 percent to 10,258.88 on Thursday.
Banking stocks may gain after their U.S. peers rallied on Thursday and as momentum players increase their holdings in Tokyo shares, with funds looking beyond exporters and aggressively adding underweight financial stocks.
The futures and options price settlement known in Japan as the special quotation or "SQ", calculated from the opening prices of the 225 shares on the Nikkei average on the second Friday of the month, is not likely to have a major impact on the market, traders said.
STOCKS TO WATCH:
--Panasonic Corp
Panasonic aims to increase its washing machines sales by 30 percent in fiscal 2012 from 2009 levels by expanding its product line-up priced for middle-income households in emerging markets, the Nikkei said on Friday.
--Mizuho Financial Group Inc
Mizuho will team up with a government-affiliated agency in Taiwan to broker partnerships between Japanese and Taiwanese start-ups and to fund them, the Nikkei business daily said on Friday.
-- Mitsubishi Heavy Industries
Mitsubishi Heavy will increase manufacturing capacity at its Indian unit's Chennai plant by about 20 percent and the company will ship Indian-made machinery tools to Southeast Asia, the Nikkei business daily said on Friday.
--Orix, Nagano Bank
Japanese financial services firm Orix and regional lender Nagano Bank plan to set up a joint venture to revive struggling companies, two sources familiar with the matter said.
Orix plans to buy preferred shares in the venture, which will be capitalised at several billion yen, said the sources, who were not authorised to discuss the matter publicly.
--Toshiba Corp's
Production at one of Toshiba's key chip factories has been halted by a brief cut in power, the company said, hitting output of NAND flash memory used in tablet computers and smartphones.
--Mitsubishi Motors Corp
Mitsubishi Motors said on Thursday it would spend 16 billion baht ($532 million) to build its new "Global Small" car in Thailand, announcing a new factory with initial capacity of 150,000 cars a year.
-- JFE Steel Corp
Ukrainian iron ore miner Ferrexpo said it signed a long-term sales contract with Japan's JFE Steel Corp, the world's fifth-biggest steelmaker. Starting this year it will deliver about 300,000 tonnes of 65 percent iron content pellets per year. (Reporting by Antoni Slodkowski; Editing by Chris Gallagher)