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Nikkei seen range-bound after election; yen to weigh

Published 08/30/2009, 07:18 PM
Updated 08/30/2009, 07:21 PM
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TOKYO, Aug 31 (Reuters) - Japan's Nikkei average is likely to move narrowly on Monday, with exporters such as Canon Inc under pressure from a stronger yen, while a historic victory by the opposition party in Sunday's election may have little impact.

Japanese voters swept the opposition to victory, ousting the long-ruling conservative Liberal Democratic Party (LDP) and handing the novice Democratic Party of Japan (DPJ) the job of reviving a struggling economy.

"The market will likely be range-bound, weighed down by the dollar/yen trading in the first half of the 93 yen zone and taking cues from a fall in overseas markets," said Yutaka Miura, a senior technical analyst at Mizuho Securities.

"The election result was as expected and the market is unlikely to move on the news alone. The focus will now shift to who will be named to the cabinet and how much the Democrats can push through their policies in an inevitable coalition."

Market participants expect the benchmark Nikkei to move between 10,400 and 10,700 on Monday. It rose 0.6 percent on Friday to 10,534.14.

Nikkei futures traded in Chicago closed at 10,590 on Friday, up 0.6 percent from the Osaka close.

In early Asian trade, the dollar slipped 0.2 percent to 93.42 yen. Investors fret about a stronger yen as it curbs exporters' profits when they are repatriated.

U.S. stocks mostly fell on Friday after a weak consumer sentiment report offset positive news from bellwethers Dell Inc and Intel Corp.

STOCKS TO WATCH

-- CSK Holdings Corp

CSK's lenders are considering plans to give the struggling information services firm a financial aid package of around 30 billion yen, the Nikkei business daily reported on Monday.

CSK plans to sell brokerage unit Cosmo Securities Co as part of a restructuring that will include the sale or consolidation of non-core operations, the Nikkei added.

-- Elpida Memory Inc

Elpida said its shareholders approved a change in the memory maker's articles of incorporation on Saturday to allow it to issue new shares for planned and future capital raises.

-- Akebono Brake

Japanese auto parts maker Akebono Brake said it is in talks with Germany's Robert Bosch to buy part of its brake business in North America.

-- Takeda Pharmaceutical

Takeda, Japan's largest drugmaker, said on Friday it is set to start an additional clinical study on a key diabetes drug candidate next month, setting a timeline that could see it receive U.S. approval in 2012.

-- Nomura Research Institute Ltd

Nomura Research Institute Ltd said on Friday it will issue 50 billion yen in convertible bonds.

-- NTN Corp

NTN Corp, a Japanese maker of auto bearings, said it would raise up to 25.3 billion yen to lift its stake in a French subsidiary and for capital investment and research and development. (Reporting by Aiko Hayashi; Editing by Chris Gallagher)

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