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Nikkei likely to tread water near 10-mth highs

Published 08/10/2009, 07:13 PM
Updated 08/10/2009, 07:18 PM
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TOKYO, Aug 11 (Reuters) - Japan's Nikkei stock average is set to tread water on Tuesday ahead of a slew of U.S. economic indicators, with light profit-taking likely after the benchmark closed at a 10-month high on Monday.

A strong earthquake jolted Tokyo and surrounding areas early Tuesday morning, and while analysts said it was still too early to know for certain, the impact of the quake appeared likely to be extremely limited.

Investors may focus on Aeon Co Ltd after the Nikkei business daily said Japan's second-largest retailer plans to start teleshopping operations by acquiring a Mitsubishi Corp unit.

U.S. stocks fell on Monday as investors booked profits following a four-week rally that took the broad S&P 500 index to a 10-month high on Friday.

"We're likely to see some profit-taking after U.S. stocks fell, while the dollar is taking a breather in its gains against the yen," said Yutaka Miura, senior technical analyst at Mizuho Securities.

"But trends haven't changed. Basically, there just aren't many reasons to buy today, and even the chance of good data out of the U.S. this week has been largely factored in."

Other analysts said the benchmark Nikkei would be supported by investor bargain-hunting on dips and the overall trend remained upwards.

The Nikkei is likely to move between 10,400 and 10,600, analysts said. It closed at 10,524.26 on Monday after rising as far as 10,585.37.

In a sign the market may open higher, Nikkei futures traded in Chicago edged up 0.3 percent from the Osaka close of 10,550. > Wall St dips after four-week rally > US dollar extends gains, Fed meeting awaited > Prices rise on bargain-hunting as stocks retreat > Gold loses over 1 percent on resurgent dollar > Oil prices fall slightly, tracking Wall Street STOCKS TO WATCH

-- Chubu Electric Power Co

Chubu Electric Power halted operations at its sole Hamaoka nuclear plant in Shizuoka prefecture after a strong quake, the trade ministry said on Tuesday.

-- Toshiba Corp

Toshiba said on Monday that it will join the Blu-ray Disc Association -- its former enemy in a bitter format war -- to make blu-ray players by year-end to tap demand for high-definition home movies. (Reporting by Elaine Lies; Editing by Edwina Gibbs)

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