Tokyo, Oct 29: Japanese stocks are expected to gain on Monday, powered by expectations of a cut in U.S. interest rates and a rally on Wall Street, with high-tech shares likely to lead the way after an upbeat outlook by Microsoft last week.
Market attention may also centre on Nissan Motor Co after it posted a surprise gain of 12 percent in quarterly operating profit on Friday as a pickup in its global car sales outweighed rising commodity prices, and kept its full-year forecasts unchanged.
''We're likely to see fairly broad gains today in Tokyo, spurred by shares like Nissan and high-techs, which may set off buying across the board,'' said Hiroichi Nishi, general manager of equity market at Nikko Cordial Securities.
''There will also be upward energy from expectations of a Fed rate cut, which seems virtually assured.'' Other market participants sounded a note of caution, saying gains could be capped if the yen rises against the dollar. The dollar was around 114.12 yen in early Asian trade. U.S. stocks rallied on Friday, buoyed by an upbeat outlook from Microsoft that boosted all three indexes, while the financial sector gained on a profit forecast from lender Countrywide Financial Microsoft lifted its full-year forecasts late on Thursday and reported quarterly profit that beat analysts' expectations. Country wide, the largest U.S. mortgage lender, reported a quarterly loss on Friday but forecast a profit in the fourth quarter as it slashes jobs.
Tokyo's benchmark Nikkei average is expected to move between 16,400 to 16,750 on Monday, supported by expectations of the Fed rate cut, with buying of futures also likely to give it upward energy.
It finished Tokyo trade at 16,505.63 on Friday, a gain of 221.46 points.
Nikkei futures traded in Chicago ended at 16,665, up from 16,490 in Osaka in a sign of how the market may move in Tokyo.
The Dow Jones industrial average rose 0.99 percent to 13,806.70 on Friday, a gain of 134.78 points. The Standard&Poor's 500 Index was up 20.88 points, or 1.38 percent, at 1,535.28. The Nasdaq Composite Index was up 53.33 points or 1.94 percent at 2,804.19.
STOCKS TO WATCH -- Nissan Motor Co T> Nissan posted a surprise gain of 12 percent in quarterly operating profit on Friday as a pickup in its global car sales outweighed rising commodity prices, and kept its full-year forecasts unchanged.
-- Marubeni Corp T> Marubeni raised its full-year net profit forecast by 7 percent to 145 billion yen ($1.27 billion) on Friday, a fifth consecutive record high, after booking a 22 percent gain in six-month profit, citing higher oil and commodity prices.
-- Tokyo Electric Power Co (TEPCO) T> TEPCO, Japan's largest electric utility, will likely post losses in the 2008/09 business year due to rising costs following an indefinite shutdown of a nuclear plant and surging oil prices, the Yomiuri newspaper said on Sunday.
-- Mitsubishi UFJ Financial Group Inc (MUFG) T> MUFG, Japan's largest bank, is likely to see its group net profit for the business year to March 2008 fall short by about 200 billion yen from its previous forecast, the Mainichi newspaper said on Sunday.
The newspaper said losses related to the U.S. subprime mortgage problems and at MUFG's credit card affiliate, as well as sluggish banking business, weighed on the bank's profitability.
-- Nippon Steel Corp T> Nippon Steel, the world's No.2 steelmaker, likely beat its first-half profit forecast thanks to strong demand from car makers and shipbuilders, the Nikkei business daily said on Sunday.
-- Softbank Corp T> Internet and telecoms giant Softbank will spend about 40 billion yen to start operations next year at a new data centre in southwestern Japan, the Nikkei business daily said on Sunday.
-- Sony Corp T> Sony said on Saturday that the operating margin of its electronics operations is expected to beat its target for the year to March, but operating losses at its videogame unit will likely be double its initial forecast.
-- Sumitomo Mitsui Financial Group Inc (SMFG) T> SMFG said on Friday it will fall short of its first-half profit forecast by 23 percent as it was forced to write down the value of shares in an affiliate, but slightly lifted its full-year outlook due to an extraordinary gain.
-- Daiichi Sankyo Co Ltd T> Drug maker Daiichi Sankyo said on Friday its first-half net profit would beat its initial estimate by 36 percent aided by strong drug sales overseas, but it only nudged its annual outlook higher as it will likely spend more to buy rights to new drug candidates.
-- Autobacs Seven Co Ltd OS> Auto supplies retailer Autobacs said on Friday it offered 65 billion yen of convertible bonds in two tranches to raise money for mergers and acquisitions to expand its sales networks in Europe, Asia and the United States.
-- NTT DoCoMo Inc T> Japan's biggest mobile phone operator posted a 21 percent fall in first-half operating profit on Friday after losing subscribers to smaller rivals but kept its full-year outlook above expectations.
-- Advantest Corp T> The world's largest maker of microchip testers posted a 23.8 percent drop in first-half net profit on Friday, reflecting chip makers' spending cuts on testers, and lowered its guidance for this year to below expectations.
Advantest also announced a share buyback on Friday, saying it would buy as many as 5.5 million of its own shares for 20 billion yen between Oct. 29 and Dec. 28.
-- Nintendo Co Ltd OS> Nintendo said on Friday it aims to launch its Wii game console in China and South Korea next year, helping accelerate growth and cement its lead over Sony and Microsoft Corp in the gaming industry.
-- Daiwa Securities Group, Nikko Cordial, Daiwa, Japan's No.2 brokerage, posted a 48 percent fall in pretax quarterly profit, hit by a fall in trading gains amid financial market volatility and a drop-off in equity financing deals.
Nikko said it would beat its profit forecast for the July-September quarter by 32 percent due to a stronger performance by its asset management-related businesses.