Japan stocks set to open higher led by Sony

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Tokyo, Oct 26: Japanese stocks are seen opening higher on Friday led by Sony Corp after it reported solid earnings.

Sony said after Thursday's close that it swung to a quarterly operating profit on strong sales of personal computers and digital cameras as well as a weaker yen, raising its full-year forecast by 2 percent.

Market participants are also looking for clues to Japan's economic health from consumer price and industrial output data to be issued just before trade opens.

Overall, the day's session is expected to be range-bound as a wait-and-see mood prevails among investors.

''Although the downside is limited, the upside is also heavy,'' said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.

''Investors will pay close attention to moves of the yen and other Asian markets.'' Japan's corporate earnings season has begun in earnest, with Nissan Motor Co, NTT DoCoMo Inc and Advantest Corp among those announcing results later in the day.

Market participants said the Nikkei average would likely trade between 16,150 and 16,450 after falling 0.5 percent to close at 16,284.17 on Thursday.

Nikkei futures traded in Chicago ended at 16,395, 115 points above Osaka futures finish, suggesting the Tokyo market could rise on Friday.

U.S. stocks fell on Thursday after disappointing results from cable TV operator Comcast and engine maker Cummins fed worries about corporate profits, while fears of more losses stemming from the subprime mortgage mess hit financial shares.

The Dow Jones Industrial average ended almost flat at 13,671.92. The Standard&Poor's 500 Index was down 0.1 percent and the Nasdaq Composite Index was down 0.9 percent.

The dollar was trading around 114 yen in line with its level in late New York trade.

STOCKS TO WATCH -- Tokyo Star Bank Ltd T> Investment fund Lone Star is prepared to accept a lower bid for its stake in Tokyo Star Bank, but the deal still hangs in the balance due to turbulent credit markets, financial sources said.

-- Honda Motor Co Honda Motor Co posted a forecast-beating 63 percent jump in quarterly earnings as strong sales of its new CR-V crossover made up for higher raw materials costs, and it raised its full-year net profit forecast on a lower tax rate.

-- Sony Corp Sony swung to a quarterly operating profit as it booked strong sales of personal computers and digital cameras and benefited from a weaker yen, and it raised its full-year forecast by 2 percent.

-- Asahi Breweries Ltd, Asahi Soft Drinks T> Asahi Breweries said on Thursday it will launch a $477 million bid to buy out minority shareholders in Asahi Soft Drinks as it looks to reduce its reliance on Japan's sluggish beer market.

Asahi Breweries said it would offer 2,120 yen per Asahi Soft Drinks share, a 14 percent premium to Thursday's closing price of 1,860 yen.

-- Maruha Nichiro Holdings Inc T> Seafood company Maruha Nichiro will likely post a 24 percent rise in group operating profit to about 15 billion yen ($131.4 million) for the year to March 2008, the Nikkei business daily reported on Friday.

That would fall short of the combined forecasts from Maruha and Nichiro by about 4 billion yen, the Nikkei said.

-- Toyota Motor Corp T> Toyota will slash the price and size of its hybrid system by around half for the next-generation Prius model, and use a nickel-metal hydride battery instead of lithium-ion, a top executive said on Thursday.

-- Shinsei Bank Ltd T> Shinsei cut its full-year profit forecast by 14 percent on Thursday and said it would not pay a dividend for the first half, hurt by losses related to the U.S. subprime mortgage market.

-- Nomura Holdings Inc T> Nomura, Japan's largest brokerage, posted its first quarterly net loss in 4-{ years due to losses on mortgage-backed securities and costs to cut jobs in the United States.

-- Canon Inc T> Canon posted an 8.9 percent drop in quarterly net profit on Thursday, hit by the yen's appreciation, but kept its full-year outlook on the back of strong demand for its digital cameras.

-- Citizen Holdings Co T> Citizen Holdings announced on Thursday it would take a 2.7 percent stake in Nichia Corp as part of an alliance in the LED (light-emitting diode) business. Nichia, in turn, will increase its stake in Citizen Holdings.

-- Hitachi Ltd T> Hitachi said on Thursday it would post a smaller-than-expected net loss for the first half ended Sept. 30, citing better-than-expected sales. It kept its earnings forecasts for the full-year to March unchanged.

Hitachi now expects to post a first half group net loss of 13.5 billion yen instead of the previously forecasted loss of 35 billion yen.

-- Nova Corp Q> The operator of English language schools said on Friday it filed for court protection from creditors after the business has been hit badly after expanding aggressively.


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