TOKYO, Nov 19 (Reuters) Japanese stocks are expected to move in a narrow range on Monday, with rises checked by selling at highs and the downside supported by strong performances in energy shares such as Inpex Holdings Inc Shares in large banks such as Mizuho Financial Group may be one focus of trade after a report in the Nikkei business daily saying Japan's banking regulator is exploring ways to allow banks to invest in nonfinancial firms operated through subsidiaries.
Japanese stocks are also likely to gain support from a rise in U.S. shares on Friday after a day of sharp price swings, mainly on bargain-hunting in technology shares and a strong showing by oil companies on the back of buoyant crude oil prices.
But much of the day's movements are expected to hinge on activity in the currency market, with stocks taking their cue from the yen.
In early Asian trade, the dollar was hovering around 110.80 yen after falling to an 18-month low of 109.10 yen last week.
''The recovery in U.S. stocks and a slightly weaker yen are likely to help boost the Nikkei, with exporters seeing some buying,'' said Yutaka Miura, senior technical analyst at Shinko Securities.
''But with concern still lingering about long-term moves in U.S. stocks and the economy, there's no real reason to buy it up too high. Expect the Nikkei to move in a narrow range.'' Market participants said the Nikkei was likely to start off with buying, rise narrowly, and then be sold, afterwards moving in a roughly 100-point range on either side of Friday's close of 15,154.61.
Energy stocks were likely to do well, given firm oil prices, and large bank shares could also be bought as a result of the Nikkei newspaper report on banks.
With an eye on rising global competitiveness among Japanese banks through deregulation, the Financial Services Agency is also considering loosening rules that will fully allow banks to trade commodities and commodity futures, the newspaper said.
The Nikkei was expected to move between 15,000 and 15,300.
In an possible indication of how narrow the benchmark average may trade, Nikkei futures in Chicago closed at 15,190 on Friday, flat from their closing price in Osaka On Friday, the Nikkei declined 241.69 points to end at 15,154.61. The benchmark has fallen 17 percent from this year's high of 18,300.39 marked in February. So far this year, it is down 12 percent.
The broader TOPIX lost 1.8 percent to 1,471.67.
The Dow Jones industrial average and the Standard&Poor's 500 Index each gained 0.5 percent on Friday.
STOCKS TO WATCH -- NTT DoCoMo Inc, KDDI Corp Japan's Fair Trade Commission told mobile phone carriers NTT DoCoMo and KDDI Corp, who are fighting for new subscribers, that their new advertisements were potentially misleading.
-- Resona Holdings Inc Japan's fourth-largest bank reported a 74 percent drop in first-half profit on Friday on losses from the sale of stocks, and after an accounting change boosted last year's results, but it lifted its full-year forecast.
-- Aeon Co Ltd, CFS Corp, Ain Pharmaciez Inc Aeon, Japan's second-biggest retailer, on Friday proposed boosting business ties with CFS Corp as part of its move to oppose the struggling drugstore operator's plans to be taken over by Ain Pharmaciez Inc.
-- Mitsubishi Corp, Kinsho Corp Mitsubishi Corp, Japan's biggest trading house, on Friday said it would make steel and nonferrous metals trader wholly owned in a tender offer as it aims to push realignment among metal distributors.
-- Sony Financial Holdings Sony Financial, which went public in October, said on Friday it booked a net profit of 16.7 billion yen for the six months to September, up 51.8 percent from a year ago, helped by a healthy insurance business.
The company kept its full-year forecast, projecting a net profit of 21 billion yen.
-- Nippon Oil Corp Nippon Oil said on Friday its wholly owned subsidiary had acquired a 40 percent stake in the 16-2 field in offshore southern Vietnam.
-- Nippon Meat Packers The company slashed its full-year profit forecast on Friday, citing sharp price rises in meat used for its hams and sausages and animal feed for its livestock production.
It now expects 15 billion yen in operating profit for the year ending next March, down 29 percent from its previous forecast.
-- Bank of Yokohama Ltd A consortium of Japanese financial institutions that includes the Bank of Yokohama Ltd is expected to submit a 310 billion yen bid for failed lender Ashikaga Bank, Japanese media said on Saturday.
-- Nichirei Corp Nichirei has earmarked about 3 billion yen to construct frozen-food logistics centres in Poland and China to meet growing demand for refrigerated distribution services, the Nikkei business daily reported on Saturday.
REUTERS DKS BST0528