TOKYO, Dec 9 (Reuters) - Japan's Nikkei average is expected
to edge higher and seen testing a fresh seven-month high on
Thursday as the yen's recent weakness is likely to attract solid
demand from investors.
Exporters' shares are expected to be supported after the
dollar's three-day advance against the yen <JPY=>, helped by
proposed tax cut extensions that sparked a rally in U.S. bond
yields.
Still, the Nikkei's rise could be limited by views that the
market is overheated and ahead of the settlement of futures and
options prices on Friday, analysts said.
"The strength of global share prices and the yen's weakness
will keep the Nikkei well-supported, but the market may be a bit
overheated, which could limit strong gains," said Hiroichi Nishi,
general manager of equity marketing at Nikko Cordial Securities.
Nikkei futures in Chicago <2NKc1> closed up 0.4 percent at
10,280 against the Osaka close <JNIc1> of 10,140.
The benchmark Nikkei <> is expected to move in a range
of 10,200 to 10,350, analysts said.
On Wednesday, the Nikkei closed up 0.9 percent at 10,232.33,
having touched an intraday high of 10,258.90 -- its highest level
since May 18.
Yumi Nishimura, a senior market analyst at Daiwa Securities
Capital Markets, said the short-term up-down ratio is seen at
158.27, the highest level since 1977, while a figure above 120 is
considered overheated.
The ratio is calculated by dividing the 25-day moving average
of stocks that gained the previous by those that fell.
Investors were reluctant about taking large new positions
ahead of the settlement price on Friday.
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.
Options traders said the Nikkei could stay around 10,250 to
10,300 until Friday as futures and options contracts expiring in
December are expected to settle around their level on that day.
Japanese shares hit a seven-month high on Wednesday, but
more upbeat factors such as good economic indicators from both
domestic and overseas markets are needed to test the next
resistance level of 10,380, analysts say.
----------------------MARKET SNAPSHOT @ 2336 GMT ------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 <.SPX> 1228.28 0.37% 4.530
USD/JPY <JPY=> 84.08 0.1% 0.080
10-YR US TSY YLD <US10YT=RR> 3.2723 -- 0.000
SPOT GOLD <XAU=> 1380.69 -0.06% -0.800
US CRUDE <CLc1> 88.63 0.40% 0.350
DOW JONES <> 11372.48 0.12% 13.32
-------------------------------------------------------------
> Financials, semiconductors help Wall St advance []
> Dollar heads for biggest 3-day rise versus yen []
> Treasury prices all for second day on deficit fears []
> Gold falls for 2nd day as Treasuries extend []
> Oil down on high U.S. fuel stocks, firm dollar []
STOCKS TO WATCH:
-- TDK Corp <6762.T>
Electronic parts maker TDK is aiming to improve profitability
and lift its profit margin to double digits for the first time in
four years in fiscal 2011, helped by the German electronic parts
unit Epcos AG, the company's President Takehiro Kamigama told the
Nikkei business daily. []
-- Sanyo Electric <6764.T>
About 400 employees of Sanyo Electric's chipmaking subsidiary
will retire next month ahead of the unit's sale to ON
Semiconductor Corp <ONNN.O>, the Nikkei business daily reported.
[]
-- Nidec Corp <6594.OS>
Japanese motor maker Nidec plans to buy Sanyo Electric's
mini-precision motor business for about 7 billion yen ($83
million) to increase its global market share for vibrating motors
used in mobile phones, the Nikkei business daily reported.
[]
-- Toyota Tsusho Corp <8015.T>
Toyota Tsusho, a Toyota Motor Corp <7203.T> group company,
said on Wednesday it will build a rare earth processing plant in
India and start shipping 3,000 to 4,000 tonnes a year of the
minerals to Japan in 2012. []
(Reporting by Ayai Tomisawa and Chikafumi Hodo; Editing by
Michael Watson)
($1=83.99 Yen)
