TOKYO, Nov 25 (Reuters) - Japan's Nikkei stock average is expected to rise towards a fresh five-month high on Thursday reflecting the dollar's advance against the yen and rises in U.S. and European shares.
Investors are expected to test the Nikkei above a five-month intraday high of 10,133.48 reached on Monday after Nikkei futures in Chicago closed at 10,145 on Wednesday, up 1 percent from their Osaka close.
Still, Tokyo participants will be cautious about buying too strongly beyond that level due to concerns over tensions on the Korean peninsula and worries about debt problems in Ireland and other European countries, traders said.
"Considering Japanese shares were well-supported yesterday despite North Korea's shelling and downgrades of Ireland, the Nikkei is expected to rebound above 10,100 today," said Kazuhiro Takahashi, general manager at Daiwa Capital Markets.
"Strong U.S. data last night lifted Wall Street shares and that will encourage short-covering in Japanese stocks today, but there are uncertainties such as the Korean tensions and Europe's debt problems," Takahashi said.
The Nikkei average is expected to move in a range of 10,000 to 10,200 on Thursday, traders said.
On Wednesday, the Nikkei fell 0.8 percent to 10,030.11 on profit-taking.
The Nikkei average has rallied roughly 10 percent this month, helped by short-covering and year-end portfolio tweaking by overseas investors.
Japanese investors, such as pension funds and investment trust funds, were detected buying index-related shares the previous day, traders said.
Overseas investors have been active buyers this month, but their buying could slow down ahead of a market holiday in the United States on Thursday and as many were likely to start closing their books soon ahead of the year-end.
Wall Street rallied on Wednesday due to improvement in the labour market and signs consumers are ready to open their wallets ahead of the biggest shopping day of the year.
New claims for U.S. unemployment benefits hit their lowest level in more than two years last week while consumer spending rose for a fourth straight month in October, suggesting the economy is nearing a self-sustaining recovery.
STOCKS TO WATCH
-- Nomura Holdings
Nomura, Japan's top brokerage, will open a data-entry centre in northeast China's Liaoning province in May to handle information about Japanese retail customers, the Nikkei reported.
Nomura expects the new center to help it save about 5-6 billion yen ($59.96-$71.95 million) over the next five years from lower personnel and office-rental expenses, the paper said.
-- Hitachi Ltd
Hitachi will cut procurement costs by 220 billion yen this fiscal year to meet its profit outlook in an increasingly competitive market, the Nikkei business daily reported.
The cut is 10 percent more than initially planned, the daily said.
-- Central Japan Railway Co
It will take Central Japan Railway Co, known locally as JR Tokai, as long as 30 years to recoup the cost of constructing a 360 kilometre (224 miles) magnetic levitation train line between Tokyo and Nagoya, the company's chairman said on Wednesday. (Reporting by Chikafumi Hodo; Editing by Chris Gallagher)