TOKYO, March 16 (Reuters) - Japan's Nikkei average is
expected to hold steady on Tuesday after hitting seven-week highs
the day before, as investors await policy meetings by the Federal
Reserve and the Bank of Japan.
Digital camera and office equipment maker Canon Inc <7751.T>
may get a lift from a Nikkei newspaper reporting saying it will
likely post a near quadrupling of operating profit in the
January-March quarter, beating expectations on strong sales of
high-end digital cameras. []
"The market may lack direction with market players waiting
for policy meetings by the Federal Reserve and the Bank of
Japan," said Hiroichi Nishi, general manager in the equity
division of Nikko Cordial Securities.
Falls in commodities and the euro's decline against the yen
<EURJPY=R> the previous day could weigh on commodities-related
shares and exporters, market players said.
Sources have told Reuters that Japan's central bank is
leaning towards easing monetary policy again at its two-day
policy review that ends on Wednesday. []
A focal point is whether the BOJ will decide to expand its
three-month fixed rate fund supply operation, either by
increasing the amount from the current 10 trillion yen ($110.5
billion), or by extending the length of the operation to six
months or longer.
Tokyo shares could rise if the yen fell in reaction to any
new easing measures by the BOJ, market players say.
Falls in the yen can help Japanese exporters by improving
their trade competitiveness and also because a weaker yen boosts
overseas profits when they are repatriated.
Later on Tuesday the interest-rate setting committee of the
Federal Reserve holds a one-day meeting in which the central bank
is widely expected to repeat its promise to keep borrowing costs
exceptionally low for "an extended period". []
Nikkei futures traded in Chicago <2NKc1> closed at 10,725, up
0.1 percent from the Osaka close <JNIc1>.
Japan's benchmark Nikkei average <> rose just barely on
Monday, closing 0.01 percent higher to hit a seven-week closing
level high of 10,751.98.
It also hit a seven-week intraday high of 10,808.84 on
Monday.
---------------------MARKET SNAPSHOT @ 2210 GMT ------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 <.SPX> 1150.51 0.05% 0.520
USD/JPY <JPY=> 90.48 0.02% 0.020
10-YR US TSY YLD <US10YT=RR> 3.6968 -- 0.000
SPOT GOLD <XAU=> 1108.6 0.05% 0.500
US CRUDE <CLc1> 79.84 0.05% 0.040
DOW JONES <> 10642.15 0.16% 17.46
-------------------------------------------------------------
> Wall St ends flat as banks rebound late []
> Euro falls vs dollar on persistent Greek worries []
> Treasuries steady ahead of Fed policy meeting []
> Gold higher on credit worry despite dollar rise []
> Oil falls 2 percent to below $80 on firmer dollar []
STOCKS TO WATCH
-- Cocokara Fine Holdings <3098.T> plans to merge with Allied
Hearts Holdings <3062.Q> on Oct. 1 to create Japan's
third-largest drug store chain, with an announcement on the deal
expected on Tuesday, the Nikkei business daily said.
-- Komatsu Ltd <6301.T>
Construction machinery maker Komatsu Ltd appears on track to
log an operating profit of more than 100 billion yen for the
financial year that ends in March 2011, due to growing demand in
China, the Nikkei newspaper said.
-- Sanrio Co Ltd <8136.T>
Sanrio, a leading maker of character goods, raised its
forecast for operating profit in the financial year that ends
this month to 9.0 billion yen, up 48 percent from its previous
forecast. []
-- ABC Mart <2670.T>
The shoe retailer said it would cancel 9.96 percent of its
own shares on March 31.
-- Toyota Motor Corp <7203.T>
Toyota said on Monday it had found no evidence to support the
driver's version of a widely publicised "runaway" Prius episode a
week ago, suggesting that authorities examine whether the
incident happened as reported to police. []
Separately, a source at a group company told Reuters on
Monday that Toyota is slashing its output of the Prius hybrid
model by 10 percent starting this month due to a slowdown in
sales from a peak last year. []
(Reporting by Masayuki Kitano; Editing by Michael Watson)
