Nikkei seen higher but in a tight range; yen eyed

TOKYO (BestGrowthStock) – Japan’s Nikkei is expected to open higher on short-covering on Monday, although it may trade in a narrow range, with market participants likely to take their cues from movements in the yen.

The Nikkei is set to be supported by short-covering after losing nearly 1 percent on Friday and after futures prices on Chicago edged higher.

“The Nikkei fell on Friday but there is no reason to sell aggressively from current levels, as technicals still look healthy with the 25-day moving average in an upward trend,” said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.

Nikkei futures traded in Chicago closed at 9,590, up from the Osaka close of 9,520.

The benchmark Nikkei (.N225: ) is likely to move between 9,400 and 9,650 on Monday after it fell 0.9 percent to close at 9,500.25 on profit-taking the previous session.

The Nikkei was well above its 25-day moving average of 9,457.93. The Nikkei was well supported by solid short-covering when the it briefly fell below its 25-day average last week.

But the Nikkei is expected to have a hard time finding clear direction after the New York market closed mixed on Friday.

In New York on Friday, Nasdaq (.IXIC: ) rose over 1 percent as Google surged due to a blowout third quarter results, while uncertainty surrounding major banks’ exposure to foreclosure losses dragged the Dow (.DJI: ) lower. (.N: )

“The Nikkei is likely to be trade in a narrow band around 9,500. The focus is on the yen but the forex market (Read more about the difference between the forex market and the stock market. ) is expected to be nervous ahead of the G20 meeting this weekend,” said Masayoshi Yano, a senior market analyst at Meiwa Securities.

STOCKS TO WATCH

— Mazda Motor Corp (7261.T: )

Ford Motor Co (F.N: ) plans to sell almost all of its remaining stake in Mazda Motor as it distances itself from the Japanese automaker it once controlled, a source with knowledge of the matter said on Saturday.

Trading house Sumitomo Corp (8053.T: ) and other Japanese business partners of Mazda are in talks to buy the shares, a source familiar with the matter said on Saturday.

— Hitachi Ltd (6501.T: )

Hitachi will partner with U.S.-based Johnson Controls Inc (JCI.N: ) in lithium-ion and other advanced battery technologies, the Nikkei business daily reported on Monday.

— Toyota Motor Corp (7203.T: )

Toyota is considering building its second car plant in Mexico to boost local output due to the yen’s strength, the Asahi newspaper reported on Saturday.

— Suzuki Motor (7269.T: )

Suzuki said on Friday it will recall a total of 90,617 units of its Swift and three other car models in Japan to fix a possible door mirror defect, with about 192,000 cars sold abroad also possibly subject to repairs.

— Inpex Corp (1605.T: )

Inpex , Japan’s top oil explorer, has pulled out from Iran’s Azadegan oil field project as expected, after U.S. sanctions against Iran over its nuclear programme posed a potential threat to the company’s business.

(Reporting by Chikafumi Hodo; Editing by Edwina Gibbs)

Nikkei seen higher but in a tight range; yen eyed