Nikkei seen down on Wall St. fall, outlook concern

TOKYO, May 23 (Reuters) Japanese stocks are expected to open down on Tuesday, with Sony Corp. and other exporters falling on uncertainty about the outlook for U.S. interest rates and on concern that growth may slow in the world's biggest economy.

Though concerns over increasing volatility in global markets are worrying some investors, Monday's limited falls in U.S. stocks and demand for undervalued stocks from Japanese financial institutions may keep the Tokyo market from falling sharply.

Masayoshi Okamoto, head of dealing at Jujiya Securities, said institutional investors would likely buy shares at the current levels as they did so last Friday.

''Institutional investors bought at a level below 16,000 (for the Nikkei average) on Friday, and we expect such buying to emerge again,'' Okamoto said.

''But the market may keep wondering what's behind the recent sell-off and how to deal with it,'' he said.

Traders expect the Nikkei average to move between 15,700 and 16,000 on Tuesday.

On Monday it fell 1.84 percent to 15,857.87, closing below 16,000 for the first time since March 8.

The Nikkei has lost more than 1,400 points since May 8.

In Chicago, Nikkei futures expiring in June closed at 15,735, a fall of 65 points from the Osaka finish.

Major banks may be a focus in Tokyo after posting record profits.

Two other banks, Resona Holdings Inc. and Sumitomo Mitsui Financial Group are among companies due to report full-year earnings later on Tuesday.

U.S. stocks fell on Monday, led by falls in cyclical shares such as aluminum producer Alcoa Inc. and diversified manufacturer 3M Co.

Risky assets such as U.S.- traded emerging-market shares, which have rallied sharply in the past two years, were avoided in favour of safe-haven assets like short-duration Treasury debt.

The Dow Jones industrial average fell 18.73 points, or 0.17 percent, to end at 11,125.33. The Nasdaq Composite Index fell 21.02 points, or 0.96 percent, to close at 2,172.86.

STOCKS TO WATCH -- Mizuho Financial Group T> Japan's second-biggest bank posted a 3.6 percent gain in annual net profit on Monday, helped by lower costs of bad loans, and forecast a further rise in earnings this year.

-- Mitsubishi UFJ Financial Group (MUFG) Profit at Mitsubishi UFJ hit a record .5 billion in the past year, though the world's top bank by assets forecast earnings would fall sharply this year.

-- Semiconductor-related stocks Orders for Japanese microchip-making equipment exceeded sales in April, an industry group said on Monday, underscoring robust growth in semiconductor demand.

-- Mitsubishi Electric Corp.

Mitsubishi Electric said on Monday the U.S. Justice Department is looking into its dynamic random access memory (DRAM) business in the United States between 1998 and 2002 for possible antitrust violations.

-- East Japan Railway Corp. (JR East) Japan's biggest railway group and Web portal Yahoo Japan Corp.

said on Monday they had struck an operational alliance.

-- Takeda Pharmaceutical Co.

The company boosted its share of Japan's prescription drug market in the fiscal year ended March 31, remaining leader in the world's second-biggest pharmaceutical market, a healthcare information company said on Monday.

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