Nikkei seen rising on U.S. stocks, dip-buying

TOKYO (Reuters) – The Nikkei share average is expected to rise on Friday, helped by gains in U.S. stocks on optimism about upcoming earnings reports, although investors will continue to cautiously monitor developments at Japan’s troubled nuclear power plant.

Analysts said dip-buying may lift the overall market as some technical charts are showing that Japan stocks are sharply oversold. The Nikkei now trades at 7.2 percent below its 25-day moving average of 10,168.

“Also, more than 60 percent of stocks on the Tokyo stock exchange’s main board are trading below their book value, so it’s time to buy back while watching the plant problems carefully,” said Hiroichi Nishi, general manager at Nikko Cordial Securities.

But ahead of the weekend, investors may not increase their positions, other market observers said.

“Despite optimism toward earnings in the U.S., investors are alert that more Japanese companies may cut annual dividends or lower their full-year estimates for this fiscal year,” said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets. “The market may stay strong in the morning session, but gains may be trimmed in the afternoon.”

Nikkei futures last traded at 9530 in Chicago, 180 points above the close in Osaka.

The benchmark Nikkei average (.N225: Quote, Profile, Research) fell 0.2 percent, or 14.46 points, to 9,435.01 on Thursday. The Topix slipped 0.8 percent to 853.95.

The Nikkei is expected to trade between 9450-9650 on Friday, analysts said.

(Reporting by Ayai Tomisawa; Editing by Chris Gallagher)

Nikkei seen rising on U.S. stocks, dip-buying