Nikkei likely to rise, but gains seen limited

                                
 (Adds Aeon to stocks to watch)  
                                
 TOKYO, Feb 19 (Reuters) - Japan's Nikkei stock average is
likely to rise on Thursday, with exporters such as Sony Corp
<6758.T> bought on a weaker yen, but gains are set to be limited
by continuing worry about the deepening U.S. recession.
                                
 Investors may focus on Japan Airlines Corp <9205.T> after the
Nikkei business daily said the company is in talks on securing up
to 200 billion yen ($2.14 billion) in low-interest government
loans and could also tap a new government programme that gives
businesses capital infusions. [ID:nN18432720]
                                
 The S&P 500 and Nasdaq closed marginally lower, and the Dow
marginally higher, with bleak housing data highlighting the
deepening U.S. recession, but Tokyo market players said the fact
that losses were limited could help support the Nikkei.
                                
 "The fact that U.S. stocks didn't fall may set the stage for
a bit of a rebound," said Nagayuki Yamagishi, a strategist at
Mitsubishi UFJ Securities.
                                
 "The downside for the Nikkei seems to be solidifying at
around 7,500, and selling will emerge as it approaches 8,000. But
otherwise there's not much in the way of direction."
                                
 Trade is likely to be confined to a narrow range, market
players said. The Nikkei <.N225> closed at 7,534.44 on Wednesday,
its lowest close in nearly four months.
                                
 Nikkei futures traded in Chicago <2NKc1> closed at 7,585, a
mere 5 points above the Osaka futures close <JNIc1>.
----------------------MARKET SNAPSHOT @ 2302 GMT ------------
                                
                 INSTRUMENT   LAST       PCT CHG   NET CHG
S&P 500             <.SPX>       788.42       -0.1%    -0.750
USD/JPY             <JPY=>       93.6        -0.18%    -0.170
10-YR US TSY YLD    <US10YT=RR>  2.768           --     0.000
SPOT GOLD           <XAU=>       981.9       -0.26%    -2.600
US CRUDE            <CLc1>       34.82        0.58%     0.200
DOW JONES           <.DJI>       7555.63      0.04%      3.03
-------------------------------------------------------------
> S&P, Nasdaq dip as housing plan fails to cut fear          [.N]
> US dollar at 6-wk peak vs yen, Obama targets foreclosure [USD/]
> Prices fall as Obama housing plan implies more debt       [US/]
> Gold surges to 7-month high on safe-haven buying         [GOL/]
> Oil prices fall further on economic gloom                 [O/R]
STOCKS TO WATCH
                                
 -- Advantest Corp <6857.T> and Tokyo Electron <8035.T>
                                
 The book-to-bill ratio for Japanese chip-making equipment
stood at 0.55 in January, meaning that for every 100 yen of sales
there were new orders worth 55 yen, an industry group said on
Wednesday. [ID:nTKG004287]
                                
 -- Aeon Co <8267.T>
                                
 The retailing group will freeze or postpone the opening of
seven large shopping centers, a shift in its expansion strategy
brought on by weak consumption, the Nikkei business daily said on
Wednesday.
                                
 -- Mitsui & Co <8031.T> and other trading firms
                                
 Five top Japanese trading houses including Mitsui & Co and
Itochu Corp <8001.T> have expressed an interest in bidding for
the right to develop Mongolia's prized Tavan Tolgoi coal mine,
three sources with direct knowledge of the matter said.
                                
 The other firms interested in bidding for the mine, which may
be worth up to $2 billion, are Sumitomo Corp <8053.T>, Marubeni
Corp <8002.T> and Sojitz Corp <2768.T>, the sources said.
[ID:nTKF004307]
 (Reporting by Elaine Lies; Editing by Edwina Gibbs)