Tokyo, Sept 13: Japanese stocks are expected to move in a narrow range on Thursday amid political uncertainty after Prime Minister Shinzo Abe said he is resigning and ahead of a possible U.S. interest rate cut next week.
Energy shares such as INPEX Holdings Inc may gain after crude oil prices vaulted to a record high $80 a barrel due to tight U.S. inventories and potential supply disruptions from a tropical storm in the Gulf of Mexico.
Investors will also focus on Kawasaki Heavy Industries after the Nikkei business daily said it would beat its profit forecast for the first half due to improved profitability in its shipbuilding and plant businesses and a weaker yen.
But the overall market is likely to keep to a tight range as investors take a wait-and-see approach before the Sept. 18 Federal Reserve rate decision and to monitor political fallout from Abe's planned resignation, announced on Wednesday.
''Overseas market reaction to Abe's resignation was limited.
Still, uncertainty remains until his successor is picked,'' said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.
''The market is likely to move in a narrow range.'' Abe's successor is expected to be chosen by the ruling Liberal Democratic Party Sept. 19 or 25, Japanese media said.
Analysts predict Tokyo's benchmark Nikkei average will move between 15,650 and 15,950 on Thursday after edging down 0.5 percent in the previous session to 15,797.60, weighed down by Abe's shock announcement.
Nikkei futures traded in Chicago finished at 15,890 on Wednesday, 110 points higher than the close of trade in Osaka indicating a higher opening.
U.S. stock indexes ended little changed on Wednesday. The Dow Jones industrial average fell 0.1 percent, the Standard&Poor's 500 Index ended almost flat and the tech-heavy Nasdaq Composite Index was down 0.2 percent.
Stocks To Watch
-- Asahi Glass Co Ltd T> Asahi Glass said on Wednesday it will sell its glass fibre business to state-owned Development Bank of Japan and private equity fund Wise Partners for 16 billion yen ($140 million) to better compete with Corning Inc -- Astellas Pharma Inc T> Astellas said on Wednesday it would begin mid-stage trials of a new drug candidate to help prevent organ rejection in kidney transplants.
-- Rakuten Inc, Tokyo Broadcasting System Inc T> Rakuten aims to raise its stake in Tokyo Broadcasting System to above 20 percent, but TBS is unwilling to become an equity-method affiliate, executives said on Wednesday.
-- Mitsui&Co T> Japan's No.2 trading company said on Wednesday it aims for an investment return of more than 10 percent on its overseas power assets by stressing higher-risk, higher-return new projects in North America, among others.
-- Kawasaki Heavy Industries The heavy machinery maker's group operating profit is expected to rise 37 percent to about 35 billion yen in the first half to Sept. 30, beating its estimate by about 9 billion yen, the Nikkei business daily reported on Thursday.
Kawasaki Heavy has enjoyed improving profitability at its shipbuilding and plant businesses, while also benefiting from a weaker yen, the newspaper said, adding that it may now raise its annual dividend to 5.5-6 yen from a previously planned 5 yen.
-- Denso Corp T> The head of top Japanese auto parts maker Denso said on Wednesday he expected business in Europe to be one of the main drivers of its overall growth, eventually making up more than one-fifth of its total sales.
-- Mitsubishi Heavy Industries T> Mitsubishi Heavy will jointly develop coal liquefaction facilities with oil majors Royal Dutch Shell and Exxon Mobil Corp , the Nikkei business daily said on Thursday.