Japan stocks seen lower on techs, steel firms eyed

TOKYO, June 26 (Reuters) Tokyo stocks are expected to fall on Monday, with shares of tech firms such as Sony Corp. and other exporters declining on concerns that further U S interest rate increases will dent demand in a key market for Japanese goods.

Shares in steel makers such as Nippon Steel Corp. may benefit from expectations of further consolidation after Europe's Arcelor bowed to an improved takeover bid from Mittal Steel on Sunday to create a world giant three times larger than its nearest rival.

U.S. rates will be a focus. Market participants expect a 17th consecutive increase when the Federal Reserve meets on Thursday.

''Right now there aren't any domestic factors to trigger buying, so the market ends up looking to Wall Street ... ahead of the Fed meeting it becomes easy for investors to take profits,'' said Yutaka Miura deputy manager of equity information at Shinko Securities.

Shares of high tech firms and other exporters are likely to be singled out for selling, partially due to concern that higher rates could lead to a decrease in demand among U.S. consumers, he added.

Chicago-traded Nikkei futures also pointed to a decline in share prices. Nikkei futures contracts expiring in September closed at 15,075, 25 points lower than the Osaka finish.

The Nikkei is likely to move between 14,900 and 15,200 on Monday, traders said. It dipped 0.08 percent on Friday.

U.S. stocks declined on Friday, with the technology-laced Nasdaq Composite Index losing 0.07 percent on concerns about rising interest rates.

STOCKS TO WATCH --Seiko Epson Corp.

The company said on Friday that it would spend about 9.45 billion yen ( million) to buy out International Business Machines Corp.'s 50 percent stake in their electronic chip-making joint venture.

--Kikkoman Corp The soy sauce maker lifted its group recurring profitforecast for he year to March 2007 to 22.71 bllion yen from a previous projection of 19.2 billion yen.

REUTERS SK BST0553