(Adds Elpida as stock to watch)
TOKYO, March 17 (Reuters) - Japan's benchmark Nikkei average
is likely to climb on Wednesday, cheered by a rise in U.S. shares
to a 17-month high after the Federal Reserve maintained its
pledge to keep interest rates low for an extended period.
Honda Motor Co <7267.T> may draw attention after saying on
Tuesday it will recall about 412,000 vehicles in the United
States to address the risk that brake pedals may feel soft and
slip closer to the floor over time. []
The company also said on Tuesday it had received about 8,000
orders for the CR-Z sporty hybrid car in Japan after less than
three weeks on the market, or eight times the monthly sales
target of 1,000 units. []
"Japanese shares are likely to start higher," said Toshiyuki
Kanayama, market analyst at Monex, Inc.
But after heading higher initially, Tokyo shares may see
their gains tempered by caution ahead of a Bank of Japan policy
decision later on Wednesday, Kanayama said.
Sources familiar with the thinking of Japan's central bank
have told Reuters it is leaning towards easing monetary policy at
its two-day policy review that ends on Wednesday, under pressure
from a government calling for action to beat deflation and which
some analysts suspect is aimed at weakening the yen.
[]
The BOJ is seen likely to keep interest rates unchanged at
0.1 percent, and a focal point is whether the central bank will
decide to expand its three-month fixed-rate fund supply
operation, either by increasing the amount from the current 10
trillion yen or by extending the length of the operation to six
months or longer.
"If we get the type of easing steps the market is hoping for,
we could see shares extend their gains," Kanayama said, referring
to possible tweaks to the BOJ's fixed-rate fund supply scheme,
adding that stocks could retreat if the BOJ announces no new
measures on Wednesday.
Some market players, however, have said that Tokyo shares may
not gain much additional lift even if such steps are taken, since
the yen has already retreated this month and Tokyo shares have
already rallied on speculation about the fixed-rate operation.
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.
Nikkei futures traded in Chicago <2NKc1> closed at 10,785.00,
up 1.1 percent from the Osaka close <JNIc1>.
Japan's benchmark Nikkei average <> dipped 0.3 percent
to 10,721.71 on Tuesday, pulling back from a seven-week intraday
high of 10,808.84 struck on Monday.
Market players said the Nikkei may trade between 10,650 and
10,900 during the day.
The U.S. Standard & Poor's 500 Index <.SPX> rose 0.8
percent, to finish at 1,159.46 on Wednesday.
Intel <INTC.O> rose 4 percent to $22.01 on speculation that
the world's top chip maker is expected to release positive
guidance for the current quarter. The Philadelphia semiconductor
index <.SOXX> gained 2.7 percent. []
The U.S. Federal Reserve held benchmark rates near zero and
maintained its pledge to keep them low for an extended period.
[]
---------------------MARKET SNAPSHOT @ 2217 GMT ------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 <.SPX> 1159.46 0.78% 8.950
USD/JPY <JPY=> 90.32 0.11% 0.100
10-YR US TSY YLD <US10YT=RR> 3.6531 -- 0.000
SPOT GOLD <XAU=> 1126.9 0.20% 2.200
US CRUDE <CLc1> 82.04 0.42% 0.340
DOW JONES <> 10685.98 0.41% 43.83
-------------------------------------------------------------
> Wall St hits fresh 17-month high after Fed []
> Dollar down vs euro, yen as Fed vows to keep rates low []
> Treasuries rise in relief over Fed statement []
> Gold rises toward $1,130 after Fed statement []
> Oil jumps 2.4 pct on weak dollar as OPEC gathers []
STOCKS TO WATCH
- Elpida Memory Inc <6665.T>
Elpida Memory is expected to post an operating profit of
almost 20 billion yen for the current year through March 31,
thanks to a recovery in prices for its mainline DRAMs, in what
would be the chipmaker's first operating profit in three years,
the Nikkei business daily said.
- Steelmakers
Japanese steelmakers have agreed to pay $200 a tonne for
high-grade coking coal from mining giants Rio Tinto <RIO.AX> and
Teck Resources <TCKb.TO> in the April-June quarter, raising the
likelihood that mills will switch to quarterly pricing of steel,
the Nikkei business daily reported.
Nippon Steel Corp <5401.T>, JFE Holdings Inc <5411.T> unit
JFE Steel Corp, Sumitomo Metal Industries Ltd <5405.T> and others
will pay 55 percent more for the coal than they did last fiscal
year, the daily said. []
- Toyota Motor Corp <7203.T>
Canadian lawmakers accused Toyota Motor Corp executives on
Tuesday of waiting too long to inform the government of problems
with faulty accelerators in some of the company's vehicles.
[]
- Astellas Pharma Inc <4503.T>
Astellas Pharma Inc unveiled a full proposed slate of
directors on Tuesday to vie for control of the board of OSI
Pharmaceuticals Inc <OSIP.O>, following through on one of its
planned tactics in its $3.5 billion bid to take over the
biotechnology company. []
(Reporting by Masayuki Kitano; Editing by Edwina Gibbs)
