Tokyo stocks seen range-bound after rally

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TOKYO, Nov 15 (Reuters) Japanese stocks are likely to move in a narrow range on Thursday after a rally in the previous session, as an overnight fall on Wall Street and the strong yen give little incentive for investors to keep buying.

One of the stocks in the spotlight is Mizuho Financial Group Inc Japan's second-largest bank posted a 17 percent drop in its first-half profit and cut its full-year forecast on Wednesday, after the subprime-market turmoil sparked losses at its brokerage unit and increased credit costs.

"The market is likely to open slightly lower in a reflex to yesterday's strong gains," Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.

"But the downside is limited at the same time, since stocks have been oversold." Market participants said the Nikkei is likely to trade between 15,400 and 15,650.

Nikkei futures traded in Chicago closed at 15,500 on Wednesday, 30 points below the Osaka close indicating a lower opening.

The dollar was around 111.17 yen after rising 0.4 percent to 111.36 yen in late New York.

The Nikkei average rose 2.5 percent on Wednesday, bouncing back from the previous session's 15-month low as a rally on Wall Street and a softening yen spurred buying of financial and other battered stocks.

The Nikkei rose 372.93 points to end at 15,499.56, snapping an eight-day losing streak. But it is still only 3.4 percent above this year's low of 14,988.77 marked on Tuesday. The broader TOPIX index gained 2.95 percent to 1,497.71.

U.S. stocks fell on Wednesday after an attempt to extend the previous session's huge rally faltered in the face of persistent worry that more fallout from the housing downturn and credit crunch lies ahead.

The Dow Jones industrial average dropped 0.57 percent and the Standard&Poor's 500 Index fell 0.71 percent. The Nasdaq Composite Index slid 1.1 percent.

STOCKS TO WATCH -- Mizuho Financial Group Inc, Shinko Securities Co Ltd Mizuho, Japan's second-largest bank, posted a 17 percent drop in first-half profit and cut its full-year outlook on Wednesday, after the subprime-market turmoil sparked losses at its brokerage unit and increased credit costs.

Mizuho Financial also said on Wednesday it will delay the merger of Mizuho Securities and Shinko Securities by four months, after Mizuho Securities posted a first-half loss due to U.S.

subprime mortgage-related losses.

-- Takeda Pharmaceutical Co Ltd The U.S. Food and Drug Administration said GlaxoSmithKline Plc's diabetes drug Avandia, will carry a new black box warning about the risk of heart attacks. Avandia competes with Takeda's Actos drug.

-- NEC Corp Japanese electronics group NEC posted a smaller first-half loss on Wednesday as sales of its IT systems outweighed scaled-back overseas operations, and it stuck to its full-year forecast.

-- Mitsubishi UFJ Financial Group, Securities Co Mitsubishi UFJ Financial Group, Japan's biggest bank, said on Wednesday it aims to take majority control of Securities Co by buying 100,000 shares in its online broking affiliate for 18 billion yen.

-- Nikko Cordial Corp Citigroup Inc and Nikko Cordial said on Wednesday they have amended some terms of a stock-swap deal to make the Japanese broker a wholly owned unit of the U.S. bank, reflecting a recent slide in Citigroup's share price.

-- Nissha Printing Co Ltd Nissha Printing will likely start providing its touch panels to almost all the world's leading mobile phone makers next year, compared with just three or four cellphone manufacturers now, Nissha's president said in an interview on Wednesday.

-- Autobacs Seven Co Autobacs, Japan's top auto goods retailer, said on Wednesday it cancelled 65 billion yen worth of convertible bonds because two funds due to buy them could not raise enough funds.

-- Tokyo Electron Ltd Applied Materials Inc, the largest supplier of tools for making microchips and a rival of Tokyo Electron, gave a profit forecast on Wednesday that was far below Wall Street expectations, sending shares down 5 percent.

Separately, Tokyo Broadcasting System said on Wednesday it would sell 1.5 million of its Tokyo Electron shares, or 12.1 billion yen worth.

-- Matsushita Electric Industrial A battery unit of Matsushita Electric plans to spend about 10 billion yen to construct a building at a factory in Wakayama Prefecture to assemble, ship and inspect lithium-ion batteries, the Nikkei business daily reported on Thursday.

The Wakayama factory has until now focuses on making battery parts. The investment will allow Matsushita to boost production while also diversifying its risk to avoid a repeat of supply disruption seen earlier this year following a fire at a main factory in Osaka, the newspaper said.


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