TOKYO, Oct 22 (Reuters) Japanese stocks are expected to fall on Monday, led down by exporters such as Sony Corp on a strong yen and a sharp decline on Wall Street due to worries over the U.S. economy.
Komatsu Ltd and Hitachi Construction Machinery Co Ltd are likely to attract investor attention following bleak comments from Caterpillar Inc on the U.S. economic outlook.
The world's top maker of earth-moving equipment said on Friday the U.S. economy will be ''near to, or even in recession'' next year, sending U.S. stocks tumbling.
''The day's session is likely to test the downside, with investors keeping eyes on the yen and other Asian stock markets,'' said Masayoshi Yano, senior manager of investment information at Tokai Tokyo Securities.
''The market is likely to be volatile. Selling pressure is strong.'' Nikkei futures traded in Chicago ended at 16,460, down by 360 points from Osaka futures trading, in a possible indication of how the market may move.
Market participants said the Nikkei would likely trade between 16,400 and 16,700.
The Nikkei average lost 1.7 percent to close at 16,814.37 on Friday, the lowest close since Sept. 28.
U.S. stocks fell by the most in more than two months on Friday, the 20th anniversary of the 1987 market crash after Caterpillar warned the housing slump was infecting the wider economy.
The Dow Jones Industrial average fell 2.6 points to end at 13,522.02. The Standard&Poor's 500 Index was down 2.6 percent.
The Nasdaq Composite Index was down 2.7 percent.
The dollar fell to a six-week low against the yen, traded around 113.70 yen compared with 114.54 in New York on Friday.
STOCKS TO WATCH -- Nippon Telegraph and Telephone Corp (NTT) T> NTT, Japan's top fixed-line operator, will cut its 2010 subscription target for its fibre-optic service to about 20 million from 30 million, the Nikkei newspaper said on Sunday.
-- Itochu Corp T> Itochu, a trading house, will likely post a 30 percent jump in first half group net profit to about 130 billion yen, helped by soaring crude oil prices, the Nikkei business daily reported on Saturday.
The Nikkei newspaper also said Itochu planned to establish a 50 billion yen fund to invest in distribution centres and other logistics facilities.
-- Bridgestone Corp. T> Bridgestone, Japan's largest tyre maker, will invest 1.3 trillion yen over five years from 2008 to boost output around the world to meet increasing demand, the Nikkei newspaper said on Saturday.
-- KDDI Corp T> KDDI, Japan's second-biggest phone company, on Friday posted an 8.8 percent rise in first-half operating profit, thanks to gains at its wireless unit, and it kept its full-year outlook below expectations.
-- Elpida Memory Inc T> Elpida said on Friday its first half operating profit likely fell 62 percent due to a tumble in the price of computer memory chips and warned that prices could remain low in the second half.
-- Komatsu Ltd, T.Rad Co T> Komatsu has spent about 1.4 billion yen to take a 3 percent stake in heat exchanger maker T.Rad Co, the Nikkei business daily reported on Saturday.
-- Mitsui O.S.K. Lines Ltd T> Mitsui O.S.K. will likely post a 50 percent jump in group pretax profit for the year to March to about 270 billion yen as it benefits from higher rates for spot charters used for dry cargo shipping, the Nikkei business daily said on Saturday.
Reuters RKM VP0545