Nikkei seen range bound; weaker yen to lend support

TOKYO (BestGrowthStock) – Japan’s Nikkei average is set to move in tight range on Monday, with investors expected to digest the news of an 85 billion euro rescue package for Ireland while the yen’s recent slip against the dollar is likely to lend support.

The 16-nation European Union approved the package on Sunday, which included an immediate 10 billion euro recapitalization for Ireland’s debt-stricken banks, fearing contagion would strike fellow strugglers Spain and Portugal.

The Nikkei dipped 0.4 percent on Friday, held back by profit-taking after rallying nearly 10 percent so far this month on a pick-up in overseas investor demand for Japanese equities.

“The Nikkei will move in tight range today as Wall Street slipped on Friday and investors are fretting over debt problems spreading into other countries in Europe,” said Hiroichi Nishi, general manager at Nikko Cordial Securities.

“But an exchange rate around 84 yen per dollar should bolster Japanese stocks,” added Nishi.

Nikkei futures in Chicago closed at 10,020, 0.4 percent below the Osaka close.

The Nikkei average (.N225: ) is expected to move in a range of 9,950 to 10,100 on Monday, traders said, below a five-month intraday high of 10,157.97 hit last Monday.

Market players said that while a softer yen against the dollar and strong sales in the United States on Black Friday, could give a boost to stocks this week, concerns over tensions on the Korean peninsula may temper any gains.

In early Asia trade, the dollar traded at 84.08, near a two-month high hit on Friday.

STOCKS TO WATCH

— Nomura Holdings Inc (8604.T: )

Brokerage Nomura Securities will form a sales team to cater to exchange-traded funds in mid-December to tap an expected medium to long-term growth in the market, the Nikkei business daily reported on Saturday.

— Kao Corp (4452.T: )

Kao Corp, Japan’s top maker of household products, wants to double its annual revenue in the next 10 years, seeking to capitalize on growing demand in China and other emerging markets, its president said on Friday.

(Reporting by Antoni Slodkowski; Editing by Edwina Gibbs)

Nikkei seen range bound; weaker yen to lend support