TOKYO, Oct 17 (Reuters) Japanese stocks are likely to edge down on Wednesday and possibly slip below 17,000 after Wall Street fell on disappointing bank results, but buying on dips will keep any such foray brief.
Sanyo Electric will be in focus after the Nikkei business daily reported that it has ended talks with Advantage Partners LLP on the sale of its semiconductor unit because Advantage is facing difficulty raising funds.
A source close to the situation later also said Sanyo would keep the unit because the talks had failed.
But the market is expected to be boosted by strong high tech stocks after better-than-expected results were posted by U.S.
technology bellwethers Yahoo and chip maker Intel after the bell, with Nintendo Co Ltd likely to shine.
''What we are likely to see in Tokyo is a reflection of Wall Street, where there was a real mix of good and bad news. Here too banks are likely to be weak and high tech strong,'' said Seiichi Miura, a strategist with Mitsubishi UFJ Securities.
''Nintendo and other game makers, like Konami, are likely to be particularly strong, and they will help support the market along with high tech stocks.'' Disappointing results from large U.S. banks such as Wells Fargo&Co, along with record-high oil prices, dragged Wall Street lower on growing concern for corporate profits.
Oil rose about a barrel on supply worries as tensions rose between Turkey and Kurdish separatists in northern Iraq, raising fears that high energy prices could dampen U.S. consumer and business spending.
Miura said that oil and trading firms are likely to gain as a result of the higher oil prices, providing the market with additional support, but other market players have warned that the long-term impact of higher oil is most likely negative.
The Nikkei was expected to trade in a range from 16,950 to 17,200. It finished Tuesday trade down 1.3 percent at 17,137.92.
Nikkei futures traded in Chicago finished at 16,960.00, down by 30.00 compared to Tuesday's Osaka futures close, in a sign that Tokyo shares may dip for the second straight day.
The Dow Jones industrial average fell 71.86 points, or 0.51 percent, to end at 13,912.94. The Standard&Poor's 500 Index slid 10.18 points, or 0.66 percent, to 1,538.54.
STOCKS TO WATCH -- Sanyo Electric T> Sanyo has ended talks with Advantage Partners LLP on the sale of its semiconductor unit because Advantage is facing difficulty raising money amid the subprime mortgage loan crisis, the Nikkei business daily reported on Wednesday.
-- Tomy Co Ltd T> Toymaker Tomy Co on Tuesday revised up its first-half earnings forecasts, citing strong sales at a unit that handles Nintendo Co products as well as higher sales of pre-school items in the European market.
Tomy said it now expects to post a group operating profit of 1.9 billion yen for the six months to Sept. 30, instead of its previous forecast for a 1.4 billion yen profit.
-- Kajima Corp T> Construction firm Kajima on Tuesday lifted its first half group net profit forecast by 64 percent thanks to higher sales, increased dividend payments from a Hawaii subsidiary, higher profits at a development unit in Asia and sales of fixed assets.
Kajima said it now expects to post a group net profit of 23 billion yen for the six months to Sept. 30, up from its prior forecast for a 14 billion yen profit.
-- Daido Steel Co T> The specialty steel maker on Tuesday raised its group operating profit forecast for the year to March by 2.7 percent to 38 billion yen, citing the lower price of nickel.
-- Omron Corp OS> Omron on Tuesday lowered its group operating profit forecast for the six months to Sept. 30 by 12 percent to 26.5 billion yen, citing weaker-than-expected sales in its industrial automation and electronics components businesses.
-- KDDI Corp T> KDDI, Japan's second-largest mobile phone operator, will likely post a group operating profit of between 240 to 250 billion yen for the first half ended Sept 30, marking a sixth straight record for the period on the strength of its au cellphone service, the Nikkei business daily said on Wednesday.
-- Mitsubishi Heavy Industries Ltd Mitsubishi Heavy and Royal Dutch Shell Plc plan to jointly develop plants that will boost crude oil production by injecting wells with carbon dioxide emitted by power facilities, the Nikkei business daily reported on Wednesday.
-- Asahi Kasei Corp T> Asahi Kasei will likely post a group operating profit of around 60 billion yen for the first half, up 18 percent year-on-year and 4 billion yen above its forecast, the Nikkei business daily reported on Wednesday.
The robust performance is partly attributable to the rising price of the synthetic resin material acrylonitrile, the paper said.
REUTERS CS BST0508