Nikkei may open lower after N.Korea nuclear test

TOKYO, Oct 10 (Reuters) Tokyo stocks may open lower on Tuesday as security concerns weigh after North Korea's announcement that it had conducted its first nuclear test, which world powers were quick to condemn.

Shares elsewhere in the region dropped on Monday, while the Tokyo market was closed for a public holiday.

''Stocks in Asia, including South Korea, fell yesterday, which suggests that investors now see a rise in the risk premium in the region,'' said Kazuhiro Takahashi, a general manager at Daiwa Securities SMBC's equity marketing department.

''I think the market will open lower today.'' But he added that the impact on Japanese shares could be limited given signs of better diplomatic ties with China and South Korea after Japan's new prime minister, Shinzo Abe, held ice-breaking summits in both countries on Sunday and Monday.

Washington sought harsh U.N. sanctions against North Korea that could further impoverish and isolate the communist state, which had said less than a week ago that it might conduct an underground nuclear test.

Another focus for the market is monthly machinery orders data, a highly volatile figure regarded as a leading gauge of capital spending, due at 2 p.m. (0500 GMT).

A Reuters poll of economists produced a median forecast of an 11.4 percent increase in orders for August from a month earlier, compared with a 16.7 percent month-on-month fall in July.

Nikkei futures trade in Chicago suggested a weaker opening.

Nikkei December futures closed at 16,300 in Chicago on Monday, a fall of 180 points from the Osaka finish on Friday.

The Nikkei average is likely to move between 16,200 and 16,500 on Tuesday, market participants said.

The benchmark fell 0.08 percent to 16,436.06 on Friday, a day after hitting its highest close since May 12.

STOCKS TO WATCH -- Toshiba Corp.

Toshiba is in talks with LG.Philips LCD Co. Ltd. to invest in a plant the South Korean flat screen maker is building in Poland, an industry source said on Monday.

-- Sony Corp.

Google Inc, which has agreed to acquire online video service YouTube Inc, announced music video deals with Warner Music and Sony BMG on Monday. YouTube also announced a music video deal with Sony BMG.

-- Yoshinoya D&C Co. Ltd.

The operator of the restaurant chain cut its group recurring profit forecast for the year to February by 26 percent to 3.9 billion yen, as tight supply hurt sales of its signature beef-bowl dish.

REUTERS DH RAI0537