TOKYO, Nov 7 (Reuters) Japanese stocks may reverse course on Wednesday, after logging a seven-week closing low the previous session and a rise on Wall Street, with investors hunting for bargains among beaten-down stocks including banks such as Mitsubishi UFJ Financial Group A stock in focus may be Softbank Corp The Japanese telecoms and Internet group said on Tuesday its operating profit rose 49 percent in the first half as its wireless unit's new price plans and a marketing blitz won subscribers from bigger rivals.
Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities, said the Nikkei average will likely rebound after US stocks rose, but the upside may be limited on uncertainty about the U.S. subprime problems and domestic politics.
''What's behind today's expected rise is the fact that stocks had been oversold and they are looking rather cheap now, coupled with solid corporate earnings results,'' he said.
Nishi said shipping firms, trading houses, steel makers and resource-related firms are also likely to come in spotlight.
Nikkei futures traded in Chicago closed at 16,385.00 on Tuesday, up 115 points from the Osaka close indicating a higher opening.
Market participants said the Nikkei average is likely to trade between 16,300 and 16,500. The benchmark ended Tuesday down 0.1 percent to book its lowest close since Sept. 18.
Ichiro Ozawa, leader of Japan's main opposition party, has reversed his sudden decision to resign and will stay on, a party executive said on Tuesday, averting a possible shift in the parliamentary power balance.
US stocks rose on Tuesday as oil prices topped a barrel and lifted shares of Exxon Mobil Corp and other energy producers, while investors picked up bank and financial services shares after the previous session's sell-off.
The Dow Jones industrial average was up 0.87 percent to end at 13,660.94.
Toyota Motor Corp is set to announce the first-half results after the market close on Wednesday.
STOCKS TO WATCH -- Japan Airlines Corp The airline's operating profit jumped nearly sevenfold in the first half on increased revenue from international flights, and it raised its full-year operating profit outlook.
-- Daiichi Sankyo Co T> The drug maker said it is confident that prasugrel, a blood clot treatment it is developing with Eli Lilly, will win regulatory approval, brushing off negative opinions from analysts.
-- Olympus Corp T> Japan's Olympus posted a record operating profit for the financial first half on Tuesday on robust sales of digital cameras and medical equipment, and raised its annual outlook to almost match market expectations.
-- Idemitsu Kosan Co T> Japan's No.3 oil refiner, said on Tuesday it would triple its oil export capacity to 3 million kilolitres (kl) per year in response to declining demand at home where the population is ageing and the shift to more fuel efficient cars and machinery is accelerating.
-- Sony Corp T> The company said it plans to launch a lighter version of its PlayStation 2 game console later this month, in a bid to drive sales of the seven-year-old machine heading into the crucial holiday season.
-- Orix Corp T> The company said on Tuesday it will buy back shares worth up to 30 billion yen (1.5 million) or up to 1.63 percent of its total outstanding shares between Nov. 7 and June 23 next year.
-- Yamada Denki Co Ltd T> Japan's largest consumer electronics retailer posted a 35.7 percent increase in its first-half operating profit, buoyed by strong sales of large flat screen TVs and PCs, and it raised the full-year outlook.
REUTERS MP AS0521