Japan stocks seen higher, metal smelters eyed

TOKYO, June 27 (Reuters) Tokyo stocks are expected to rise on Tuesday as investors seek real estate firms, banks and other stocks seen as cheap after a recent sell-off.

Non-ferrous metal firms, such as Mitsubishi Materials Corp., may be a focus after copper miner Phelps Dodge said it would buy two nickel-producing companies for about billion to create the world's largest nickel miner.

''It's time for confidence to be restored in the market,'' said Shinji Igarashi, equity manager at Chuo Securities, adding that a consensus is being formed that the Nikkei average is firmly underpinned at the 15,000 mark.

The Nikkei average is likely to move between 15,100 and 15,300 on Tuesday, traders said. It rose 0.19 percent on Monday to 15,152.40, its highest close in almost three weeks.

The Nikkei fell almost 20 percent until earlier this month from a 5-1/2-year high marked in April.

Chicago-traded Nikkei futures also pointed to a rise in share prices. Nikkei futures contracts expiring in September closed at 15,150, a 10 point rise from the Osaka finish.

But concerns remain about further increases in U.S. interest rates as investors look ahead to the Federal Reserve's policy-setting meeting on Wednesday and Thursday.

Higher U.S. rates are seen as a negative for Japanese stocks because they cut into consumers' spending at a key market for Japanese products.

STOCKS TO WATCH -- Ryohin Keikaku Co. Ltd.

The clothing and household goods retailer said on Monday that group net profit for the three months to May fell 2.2 percent to 2.83 billion yen (.34 million) from a year earlier. Quarterly operating profit rose 13.6 percent to 5.41 billion yen.

-- Aeon Co.

Japan's No. 2 retailer said on Monday it would revise up its 2006/07 earnings forecast when it announces its quarterly results next week, to reflect the addition of new subsidiaries.

-- Daikin Industries Ltd.

Daikin, fresh from a deal to buy a Malaysian rival, said on Monday it aims to become the world's biggest air conditioner maker in two years' time, targeting a 70 percent jump in revenue to more than .2 billion.

-- Sony Corp.

Chief Executive Howard Stringer told a media roundtable on Monday that U.S. box office sales of Sony's ''Da Vinci Code'' surpassed 0 million over the weekend, and the film is also doing well in the rest of the world, helping buttress its financial performance.

Asked about the high price of its upcoming PlayStation 3 game console, Stringer said the advanced technologies packed in the new machine will help it compete favourably with Microsoft Corp.'s Xbox 360 and Nintendo Co. Ltd.'s forthcoming Wii.

Reuters SK VP0515