TOKYO, Aug 25 (Reuters) - Japan's Nikkei average is likely to take a breather on Tuesday, weighed down by exporters such as Canon Inc that led a rally the previous day, while trade may be cautious ahead of U.S. economic data and the election.
Market analysts say many expect Japan's opposition Democratic Party to win the Aug. 30 election but investors remain hesitant about actively taking positions before they see the results.
"The market will likely start the day under pressure after sharp gains yesterday on short-covering and U.S. stocks also ended mixed," said Kazuhiro Takahashi, general manager at Daiwa Securities SMBC.
"Trade could be also slow as investors want to wait and see economic data such as Case-Shiller home price indexes."
Nikkei futures traded in Chicago closed at 10,610 on Monday, up 0.6 percent from the Osaka close.
Market participants expect the benchmark Nikkei to move between 10,400 and 10,650 on Tuesday. It jumped 3.4 percent the previous day to end at 10,581.05, erasing a 3.4 percent decline it posted last week.
U.S. stocks ended the day barely changed on Monday as investors took a break from a four-day rally that lifted major indexes to 10-month highs. > Wall St ends flat, investors pause after 4-day rally > Dollar edges up ahead of U.S. consumer data > Bonds rise on bargain-hunting, growth worries > Gold retreats on dollar rise; currencies in focus > Oil prices touch 10-month high on economic hopes
STOCKS TO WATCH
-- Japan Airlines Corp
Japan Airlines is considering unloading low-margin international flights catering to vacationers in order to slash operational costs and shrink its work force, the Nikkei business daily said. -- Sumitomo Mitsui Financial Group
Sumitomo Mitsui Financial Group, Japan's third-largest bank, said it will issue preferred securities as it looks to refinance 340 billion yen ($3.6 billion) of similar securities redeemed earlier this year.
Separately, Nikko Cordial, a Japanese broker set to be sold by Citigroup Inc, said it would set up a wholesale trading division as it reorganises for its acquisition by Sumitomo Mitsui Financial Group.
-- Mizuho Financial Group
Mizuho Financial Group, Japan's second-largest bank by assets, said it would issue 72.5 billion yen ($767.4 million) in preferred securities, bringing its planned issuance to more than originally announced. (Reporting by Aiko Hayashi; Editing by Edwina Gibbs)