Nikkei seen falling under 16,000 after U.S. tumble

TOKYO, May 18 (Reuters) Japanese stocks are seen falling on Thursday, with the benchmark Nikkei average likely to slip under the 16,000 level for the first time in two months after a tumble in U.S.

stocks on interest rate rise concerns.

Shares of Nomura Holdings Inc. may be a focus. Japan's biggest brokerage said on Wednesday it planned to pay investors a dividend of 32 yen per share in the financial year to March 2007, compared with 48 yen per share last year.

A weaker yen may help offset losses in shares of technology firms and other exporters. In early Asian trade the yen was at 110.92 to the dollar, off an eight-month high of 108.96 hit on Wednesday. A weaker yen helps Japan's exporters as it increases profits when revenues from abroad are brought home.

''Today is going to be tough for the Japanese market,'' said Toru Otsuka, deputy general manager of investment information at Mizuho Investors Securities, referring to the fall on Wall Street.

''It is very likely that we'll see the Nikkei fall below the 16,000 mark briefly today.'' Traders expect the Nikkei average to move between 15,900 and 16,200 on Thursday.

It gained 0.92 percent to 16,307.67 on Wednesday, snapping asix-day losing streak, as waning concern about a strong yen encouraged investors to return to some high-tech shares.

In Chicago, Nikkei futures expiring in June closed at 15,925, a decline of 345 points from the Osaka finish.

The Dow Jones industrial average recorded its biggest one-day drop in three years on Wednesday as investors bet the Federal Reserve will need to keep raising rates to fight inflation.

The United States is one of the largest markets for Japan's exporters.

STOCKS TO WATCH -- Sony Corp.

Brokerage HSBC raised its rating on the electronics and intertainment conglomerate to ''overweight'' from ''neutral'' saying the share price now reflects most of the company's poor prospects for fiscal 2006.

-- Konami Corp.

The video game software firm said on Wednesday its group operating profit would total 29 billion yen in the year to March 2007, sharply up from 2.48 billion yen in 2005/06, thanks to sales of game software and other products related to the World Cup soccer tournament in Germany.

But the projection fell short of the market consensus of 29.4 billion yen, based on the average of 15 analysts polled by Reuters Estimates.

-- Tokyo Broadcasting System Inc. (TBS) Japan's third-biggest television network posted a 2005/2006 profit fall of 27 percent, but forecast a stronger-than-expected recovery this year on brisk advertising revenues.

Reuters SK GC0613