Tokyo stocks seen weaker after Wall St falls

Tokyo, Sept 8: Tokyo stocks are expected to edge lower on Friday as worries about the strength of the US economy keep any gains in shares of exporters in check after the previous day's sell-off.

But the market is underpinned by earnings optimism, especially for firms benefiting from growing global demand for consumer electronics such as flat panel TVs and those which gain from a property market recovery at home, analysts said.

The benchmark Nikkei average posted its biggest one-day fall in a month on Thursday, partly pulled down by selling by arbitrage traders before settlement of September Nikkei index futures and options contracts at Friday's opening.

The market's direction is unclear even if the settlement goes off smoothly, said Shinji Igarashi, an equity manager at Chuo Securities.

''There are hopes its completion will lift the mood,'' he said.

''But there are also chances that the fall on Wall Street will drag down the market here.'' Nikkei index futures traded in Chicago suggested a lower opening.

Chicago's Nikkei December futures closed at 15,935 on Thursday, down 15 points from the Osaka finish.

Market participants said the Nikkei average would likely move between 15,800 and 16,200 on Friday after losing 1.67 percent to 16,012.41 in the previous session.

It hit a three-month closing high on Tuesday.

The Bank of Japan ends a two-day policy meeting later on Friday.

The market expects no change in policy.

Mitsui Fudosan Co. Ltd. and other property stocks may be a focus point as office broker Miki Shoji said on Thursday that the vacancy rate for central Tokyo offices fell below 3 percent in August for the first time in more than a decade, underlining a buoyant property market in Japan's capital.

In New York, the Dow Jones industrial average was down 0.66 percent at 11,331.44 as signs of housing market weakness and worries about the outlook for interest rates made investors uneasy about prospects for consumer spending and corporate profits.

STOCKS TO WATCH

Takeda Pharmaceutical Co.

Japan's top drug maker said on Thursday it would stop developing a drug compound it had hoped would be a successor to its popular Actos diabetes treatment, whose U.S. patent expires in 2011.

KDDI Corp.

KDDI, Japan's No.2 telecoms company, added the most new mobile phone customers in August, outpacing bigger rival NTT DoCoMo Inc, a research group said on Thursday.

KDDI took the top spot from DoCoMo for a third month since the current business year started in April.

Pioneer Corp.

The struggling consumer electronics maker said on Thursday it revised down its dividend forecast for the first half to 5 yen per share from 7.5 yen previously.

Toray Industries Inc.

Chemical and textile maker Toray has developed a new type of optical film for backlights that allows liquid crystal display panels to be made thinner and lighter, business daily Nihon Keizai said on Friday.

REUTERS