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Nikkei seen weighed down by yen but range-bound

Published 12/06/2010, 06:29 PM
Updated 12/06/2010, 06:32 PM
USD/JPY
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TOKYO, Dec 7 (Reuters) - Japan's Nikkei average is expected to be under slight downward pressure on Tuesday given recent firmness of the yen against the dollar but Tokyo stocks are seen trading in narrow ranges due to a lack of incentives.

Japanese shares are also expected to be range-bound as the Dow Jones industrial average traded in a tight 42-point range on Monday.

"Activity is expected to be sluggish today. Exporter shares could be pressured by the recent strength in the yen, but the Nikkei is not expected to move sharply," said Kazuhiro Takahashi, a general manager at Daiwa Capital Markets.

Nikkei futures in Chicago closed at 10,190, little changed from the Osaka close of 10,180.

The benchmark Nikkei is expected to move in a range of 10,100 to 10,250, analysts said.

On Monday the Nikkei closed down 0.1 percent or 11.09 points at 10,167.23. It had traded in a narrow 36-point range on Monday, with turnover on the Tokyo exchange's first section dropping to the lowest since Oct. 25.

The Nikkei is expected to find support around 10,000 and another technical support seen at the 200-day moving average of 9,914, while resistance is seen around 10,250 -- near the six-month high reached last week.

Market participants were hesitant about taking large positions ahead of the closely watched settlement price to be set on Friday, analysts said.

The settlement is known in Japan as the special quotation or "SQ", which is calculated from the opening prices of the 225 shares on the Nikkei average on the second Friday of the month. ----------------------MARKET SNAPSHOT @ 2309 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG S&P 500 1223.12 -0.13% -1.590 USD/JPY 82.64 -0.04% -0.030 10-YR US TSY YLD 2.9294 -- 0.000 SPOT GOLD 1424.69 0.13% 1.840 US CRUDE 88.99 -0.44% -0.380 DOW JONES 11362.19 -0.17% -19.90 ------------------------------------------------------------- > Wall St ends flat on euro zone debt woes > Euro falls as euro zone countries seen split > Bonds rise on Bernanke remarks, Europe jitters > Gold climbs above $1,420/oz on haven buying > Oil edges up on cold, economic recovery hopes

STOCKS TO WATCH:

-- Sumitomo Corp and Mitsubishi Corp

Trading companies Sumitomo Corp and Mitsubishi Corp are in discussions to acquire stakes in U.S.-based rare earths producer Molycorp Inc, Japanese financial daily Nikkei reported.

-- Nissan Motor Co

Nissan will stop building the Rogue crossover vehicle in Japan at its next remodelling around 2013, transferring output of one of its most popular U.S. vehicles to reduce exposure to the yen, an executive with direct knowledge of the matter said.

-- KDDI Corp

KDDI, Japan's second-largest mobile phone operator, is in talks with several Asian Internet service and content firms about mergers and acquisitions, the company's new president said on Monday.

-- Mazda Motor Corp

Mazda aims to nearly double its annual sales to around 2 million vehicles in about five years, with sales additions from fast-growing markets such as Brazil and India, its chief executive said on Monday.

-- Yamaha Motor

Yamaha Motor and Volvo Penta, a unit of Volvo AB, will enter technological cooperation to develop boat control systems. The partnership will initially focus on Volvo Penta's existing technology. (Reporting by Chikafumi Hodo; Editing by Michael Watson)

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