TOKYO, April 22 (Reuters) - Japan's Nikkei is set to edge lower and stay in a tight range on Friday as exporters will come under pressure from a stronger yen, triggering profit-taking after sharp rises over the past two days.
The dollar tumbled for a third straight day on Thursday as record low interest rates and the crushing weight of the U.S. budget deficit pushed it closer to an all-time trough against major currencies. [ID:nN21298998]
Against the Japanese currency, the dollar fell 0.7 percent to 81.89 yen .
"Investors are likely to stay on the sidelines before earnings, so they may unload recently bought positions ahead of the weekend," said Hiroichi Nishi, general manager at SMBC Nikko Securities.
He added that volume was likely to stay low as major overseas markets such as the United States and Britain, as well as some Asian markets, are closed on Friday.
Analysts also said commodity shares such as trading houses may outform after the prices of precious metals and crude futures gained.
"Profit-taking is expected to lead early trade, and the index will likely stay nearly flat throughout the session," said Kenichi Hirano, a strategist at Tachibana Securities.
The Nikkei has gained more than 2.5 percent over the past two days.
Nikkei futures in Chicago <2NKc1> pointed to a slightly lower open at 9,650,
down 30 points from the Osaka close
The benchmark Nikkei average rose 0.8 percent to 9,685.77 On Thursday, while the broader Topix gained 0.5 percent to 841.72. ----------------------MARKET SNAPSHOT @ 2259 GMT ------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 1337.38 0.53% 7.020
USD/JPY 81.88 0.05% 0.040
10-YR US TSY YLD 3.3945 -- -0.013
SPOT GOLD 1506.9 0.28% 4.160
US CRUDE
> Wall St ends strong week with new earnings attitude > U.S. dollar tumbles broadly; all-time lows in sight > Yields dip ahead of Fed on slowdown fears > Gold hits record for fifth session, dollar tumbles > Oil lifted by weak dollar in volatile trade
STOCKS TO WATCH
--Isuzu Motors
Isuzu Motors Ltd is negotiating a tie-up with German peer Volkswagen AG
The two firms will soon sign a confidentiality agreement and start full-scale talks, aiming to close a deal this autumn, the paper said.
--Canon Inc
Canon is expected to report a group operating profit of around 80 billion yen ($977,457,508.395)for the last quarter, an 8 percent drop on the year, in the wake of the March 11 disaster, the Nikkei business daily said. ($1 = 81.845 Japanese Yen) (Reporting by Ayai Tomisawa; Editing by Edmund Klamann)