TOKYO, April 19 (Reuters) - Japan's Nikkei is set to fall on Tuesday after U.S. Stocks dropped as rating agency Standard & Poor's downgraded the country's credit outlook to negative.
Standard & Poor's revised its outlook on the United States credit rating downward to "negative" on a poor U.S. budget outlook, while China took additional measures to curb liquidity. For details, see [ID:nN18195555]
A stronger yen is also likely to sour sentiment for Tokyo stocks especially exporters.
The euro and dollar were steady against the yen in early trade after tumbling 1.9 percent and 0.6 percent, respectively, the previous day on an unwinding of carry trades.
"We will probably see the Nikkei dip to the 9500-line in early trade, but there are still hopes that the central bank may buy ETF securities so we may not see a sharp drop," said Hiroichi Nishi, general manager at SMBC Nikko Securities.
Analysts also said that tech shares may underperform.
Texas Instruments Inc fell 2 percent to $34.10 after the chipmaker reported a first-quarter profit that missed expectations by a penny.
Texas Instruments warned that its second-quarter revenue would be hurt by interruptions in production due to the quake damage and power-supply disruptions at those two plants in Japan.[ID:nN18221973]
Nikkei futures in Chicago <2NKc1> pointed to a lower open at
9,490, down 70 points from the Osaka close
The benchmark Nikkei average ended down 0.4 percent at 9,556.65 on Monday, while the broader Topix shed 0.6 percent to 836.34.
Analysts said that the Nikkei is expected to trade between 9,400-9,600 on Tuesday.
Tuesday's trading volume may stay thin, analysts said, as investors may want to stay on the sidelines before Japanese corporate earnings starting later this month.
Volume hit its second-lowest level for 2011 on Monday. ----------------------MARKET SNAPSHOT @ 2311 GMT ------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 1305.14 -1.1% -14.540
USD/JPY 82.37 -0.11% -0.090
10-YR US TSY YLD 3.3799 -- 0.000
SPOT GOLD 1494.75 0.90% 13.400
US CRUDE
> Wall St falls on sovereign debt fears, TI off late > Euro sinks as debt concerns outweigh U.S. outlook > Debt warnings won't always be this easy for US bonds > Gold hits record near $1,500/oz after S&P move > Oil falls on S&P U.S. outlook revision, demand worry
STOCKS TO WATCH
-77 Bank
77 Bank said Monday it is considering requesting an injection of public funds to replenish its capital base so that it can better meet the financial needs of companies hit by the March 11 earthquake and tsunami.
It also said that it would report an operating loss of 30 billion yen for the fiscal year ended March 2011.
- Toshiba Corp
Toshiba likely recorded a net profit of slightly more than 130 billion yen for the year ended last month, chalking up its first group net profit in three years on brisk business in flash memory chips, the Nikkei business daily reported.
- Itochu Corp , Sumitomo Corp
Itochu and Sumitomo have taken roughly 20 percent stakes in a U.S. project to build and operate one of the world's largest wind farms, the Nikkei business daily reported.
The two trading houses spent some 200 million dollars, or around 17 billion yen, apiece to buy their interests from General Electric Co, which previously owned a 90 percent stake, the daily said.
- Mori Seiki
Mori Seiki has begun negotiations with two of the world's biggest machining equipment makers, Gildemeister AG and Shenyang Machine Tool Co., to set up a three-way joint venture in China, the Nikkei business daily said.
- Honda Motor Co
Honda Motor plans to produce electric vehicles at two Chinese units and launch sales there as early as 2012, the Nikkei business daily reported, citing company sources. (Reporting by Ayai Tomisawa)