Japan stocks may rise but pre-Fed caution weighs

TOKYO, June 29 (Reuters) Tokyo stocks are likely to open higher on Thursday following rises on Wall Street, but gains may be capped ahead of the outcome of a U.S. Federal Reserve monetary policy-setting meeting.

Japanese stocks have faltered recently on concern that the U.S. central bank's credit tightening campaign could slow economic growth in one of Japan's key export markets.

''The Nikkei may test 15,000 but it is unlikely to recoup all the losses from the previous session,'' said Yutaka Miura, a deputy manager in the equity information department at Shinko Securities.

The Nikkei share average dropped 1.88 percent on Wednesday.

Chicago-traded Nikkei futures contracts expiring in September closed at 15,010, 90 points higher than the Osaka finish.

The Nikkei is likely to move between 14,800 and 15,100 on Thursday, traders said.

A rise in oil prices may help energy-related stocks, but Miura said that may also rekindle inflationary fears and raise the possibility of further U.S. rate hikes, putting the stock market under pressure.

On the home front, Japanese industrial output data for May will be released at 2350 GMT. Forecasts in a Reuters poll of 24 economists centred on a fall of 0.1 percent from a month earlier.

Steel stocks may draw buyers on re-emerging expectations of consolidation in the industry.

Dealers said on Wednesday that Russian Steel firm Severstal is mulling a bid for Anglo-Dutch rival Corus Group, just days after a possible merger with Arcelor was derailed.

U.S. stocks rose on Wednesday, with the technology-laced Nasdaq Composite Index adding 0.55 percent.

STOCKS TO WATCH -- Nippon Mining Holdings Inc.

The operator of Japan's largest copper smelter said on Wednesday it aimed to raise up to 75.63 billion yen (1 million) by issuing 70 million new shares to fund its capital investment programme.

-- Mizuho Financial Group Japan's second-biggest bank said on Wednesday it would repay next week the remaining 600 billion yen (.17 billion) it owes the government from bailouts in the 1990s.

-- Japan Tobacco Inc.

The world's third-biggest tobacco company said on Wednesday it hoped that planned price hikes would boost its 2006/07 profits above its April forecast.

Reuters SK VP0627