Nikkei seen rangebound, lower futures may offset foreign buying

TOKYO (Reuters) – Japan’s Nikkei is expected to be rangebound on Monday, with a weak close for Nikkei futures in Chicago at the end of last week likely to offset any optimism from gains on Wall Street.

Analysts said persistent concerns about a crippled nuclear plant in Japan are likely remain the center of investor focus, though foreign buying may support the Nikkei above 9,500.

“Optimism in the global economy should lend support to the Japanese market to some extent,” said Hiroichi Nishi, general manager at Nikko Cordial Securities, adding that technology shares may outperform as their U.S. counterparts rallied on an upbeat outlook from Oracle Corp (ORCL.O: Quote, Profile, Research).

He added that Japan stocks are still oversold, with the Nikkei trading 5.7 percent below its 25-day moving average of 10,116.

Foreign investors’ net buying of Japanese shares reached a record high during the week of March 14, the week after a devastating earthquake hit northeastern Japan, Ministry of Finance data showed, and traders said their buying would continue this week.

Overseas investors bought a net 891 billion yen ($11 billion) of Japanese stocks in the week of March 14-18, the highest since records began in 2005.

“Although investors are expected to be alert on news flows related to changes in companies’ full-year forecasts and dividend payouts, the fundamental mood should not be that bad thanks to foreign buying,” said Yumi Nishimura, a senior market analyst at Daiwa Securities Capital Markets.

Nikkei futures last traded at 9,400 in Chicago, 50 points lower the close in Osaka.

The benchmark Nikkei (.N225: Quote, Profile, Research) ended up 1.1 percent or 101.12 points at 9,536.13 on Friday. The broader Topix index (.TOPX: Quote, Profile, Research) gained 0.4 percent to 857.38.

The Nikkei is expected to trade between 9,400-9,600 on Monday, analysts said.

Oracle drives Wall St higher; volume stays weak.

Dollar rallies as focus shifts to U.S. rate outlook.

Take profits on U.S. Treasury 5/30s curve.

Gold falls as dollar rises, Fed comments weigh.

Oil falls; Mideast unrest, Japan dampen volume.


–Elpida Memory Inc

Amid concerns over disruptions to the global supply of DRAM chips, leading manufacturer Elpida reveals that it has obtained enough silicon wafers and other key materials for deliveries through the end of July, the Nikkei business daily said.

–Takeda Pharmaceutical

Takeda said that it will increase sales staff in its China subsidiary by 3.6 times to about 900 people in 2015 in order to boost its China sales, the Nikkei business daily reported.

–JX Holdings Inc

Fuel supplies to gasoline stations in the regions slammed by the March 11 earthquake and tsunami are gradually starting to recover, but it may take some time before business gets back to normal, the Nikkei business daily said.

In the six prefectures of Tohoku, roughly 80% of the gas stations affiliated with JX Holdings unit JX Nippon Oil & Energy Corp have now resumed operations, the Nikkei said. (Reporting by Ayai Tomisawa; Editing by Joseph Radford)

Nikkei seen rangebound, lower futures may offset foreign buying