Japan stocks seen slipping at open, INPEX a focus

TOKYO, May 17 (Reuters) Japanese stocks are seen falling at the start of trade on Wednesday, with exporters under pressure on a decline in U.S. stocks and a rise in the yen, but bargain hunting could lift the market later.

INPEX Holdings Inc. may be a focus. Japan's biggest oil explorer on Tuesday raised its full-year profit forecast by 7.8 percent on soaring oil prices, after its INPEX Corp. unit posted a 35 per cent jump in 2005/06 profit.

The Nikkei has fallen for the past six sessions on a combination of factors including a strong yen, while falls in U.S. stocks have also weighed on investor sentiment.

''I don't think the Tokyo market is able to heal by itself at the moment. To move out of this slump, I think we'll need to see U.S.

stocks advance,'' said Masayoshi Okamoto, head of dealing at Jujiya Securities.

But a perception that Japanese stocks are attractively valued after recent losses may spark some buying in late trade, Okamoto said.

''Even more so than yesterday, I think the desire to buy on declines will be stronger today. The main target for the market today will be to inch higher by the close of trade,'' he said.

Traders expect the Nikkei average to move between 16,000 and 16,350 on Wednesday.

It slid 1.99 percent to 16,158.42 on Tuesday as a fall in commodities prices prompted heavy selling of energy and resources-related firms.

In Chicago, Nikkei futures expiring in June closed at 16,240, an advance of 80 points from the Osaka finish.

The yen was at around 109.68 to the dollar in early Asian trade on Wednesday. It rose against the dollar on Tuesday after U.S.

government data suggested interest rates may not need to rise much further.

A strong yen is a minus for Japan's exporters as it eats into profits when earnings from abroad are brought home.

U.S. stocks fell on Tuesday on lacklustre results from retailers.

STOCKS TO WATCH -- Nippon Steel Corp. and other steel firms Top Japanese steel makers will seek steel sheet price rises of 5-10 percent from auto and electronics makers due to higher iron ore prices, the Nihon Keizai business daily reported on Wednesday.

-- Circle K Sunkus Co.

MAC Asset Management, a fund led by bureaucrat turned activist investor Yoshiaki Murakami, has taken a 5.07 percent stake in the convenience store operator, according to a filing on Tuesday. -- Eisai Co. Ltd.

Japan's fourth-largest drug maker said on Tuesday its annual recurring profit rose 12 percent due to strong sales of an Alzheimer's drug, but forecast its growth will weaken.

-- Aiful Corp.

Japan's biggest consumer lender reported a 13 percent drop in annual profit and forecast a further decline this year after regulators ordered a punitive suspension of its business this month.

REUTERS SK PM0606