TOKYO, Nov 26 (Reuters) - Japan's Nikkei stock average is likely to edge higher on Friday, continuing its bullish trend since the start of the month as the dollar's recovery against the yen is expected to spur solid bargain-hunting demand.
Japanese stocks are expected to be well-supported following gains in European stock markets, but investors are likely to refrain from actively taking fresh positions as they want to see how the U.S. shares move when market participants return from the Thanksgiving holiday later in the day, traders said.
"The Nikkei could open slightly higher due the yen's recent falls, but in general trading is expected be thin today as people don't want to take more positions before the weekend," said Hiroichi Nishi, general manager at Nikko Cordial Securities.
"Based on the perception that there is ample liquidity in the market, we are expected to see demand for Japanese stocks in a wide variety of shares including small- and mid-cap shares."
The Nikkei average is expected to move in a range of 10,050 to 10,200 on Friday, traders said.
The Nikkei rose 0.5 percent to 10,079.76 the previous day, supported by demand from overseas investors.
The Nikkei hit a five-month intraday high of 10,157.97 on Monday, but has struggled to retest the high since then on views that the market was overheating after seeing it rally almost 10 percent since the start of the month.
Investors were also expected to be hesitant about building up more buy positions due to concerns over tensions on the Korean peninsula and worries that debt problems in Ireland could spread to other European countries such as Portugal and Spain.
But the Nikkei is likely to find solid bargain-hunting demand at this week's low of 9,904.92, which is also near the 200-moving average, now at 9,915, traders said.
"Plenty of bargain-hunters are waiting to buy on dips, which should keep Japanese shares generally well-supported," a trader at a Japanese securities house said. ----------------------MARKET SNAPSHOT @ 2303 GMT ------------
INSTRUMENT LAST PCT CHG NET CHG S&P 500 1198.35 1.49% 17.620 USD/JPY 83.64 0.05% 0.040 10-YR US TSY YLD 2.912 -- 0.000 SPOT GOLD 1373.99 -0.01% -0.130 US CRUDE 84.13 0.32% 0.270 DOW JONES 11187.28 1.37% 150.91 ------------------------------------------------------------- > U.S. stock market closed for Thanksgiving holiday > Euro soft but off 2-mth lows; dollar gains > U.S. bond market closed for Thanksgiving holiday > Gold flat; Europe debt worries, Koreas support > Oil inches up after big jump; Europe debt in focus
STOCKS TO WATCH
--FamilyMart Co
FamilyMart, Japanese convenience store operator, will freeze its loss-making U.S. operation at just 10 stores as it assesses its strategy, while its ambitious China expansion is proceeding faster than planned, its president said on Thursday.
-- Olympus Corp
Olympus, Japanese camera and endoscope maker, said on Thursday it would return its loss-making camera division to the black in the year to March 2012 by offering new products and boosting Chinese distribution.
-- Sony Corp
Sony will re-enter Japan's electronic book market and open an online bookstore offering 20,000 titles, almost all in Japanese, in time for the year-end shopping rush, it said on Thursday.
--Elpida Memory
Elpida said Japanese PC memory chip maker Elpida Memory said on Thursday it plans to raise about 10.1 billion yen ($120.9 million) by issuing Taiwan depositary receipts (TDRs) to step up DRAM development.
-- Sapporo Holdings
Japanese brewer Sapporo plans to move into the South Korean market through a sales tie-up with Maeil Dairy, one of the country's biggest dairy companies, the Japanese firm said on Thursday.
-- Honda Motor Co
Honda, Japan's No.2 automaker, sees overall domestic automobile sales declining by 20,000 units to 635,000 units for the financial year to March 2012, the business daily Nikkei reported on Friday.
Honda plans to have hybrids account for more than 20 percent of its Japanese sales in the financial year, the newspaper said. (Reporting by Chikafumi Hodo; Editing by Chris Gallagher)