Tokyo stocks seen taking cue from machinery orders

TOKYO, Jan 15 (Reuters) Tokyo stocks are likely to take their cue on Monday from machinery orders data, due to be released just before the start of trade, and shares may rise if it is better than expected.

Shares of machinery firms such as Fanuc Ltd. and Komatsu Ltd.

may be a focus for the market.

Core machinery orders, a highly volatile figure regarded as a leading gauge of capital spending, are expected to have risen 3.4 percent in November, compared with a 2.8 percent rise the previous month, according to a Reuters poll.

''The Nikkei could move either way depending on the machinery data, but it is still likely to hover around the 17,000 level,'' said Kazuhiro Takahashi, general manager of the equity marketing department at Daiwa Securities SMBC.

''Investors will likely keep buying exporters, however, encouraged by a continuing softer yen.'' The yen was at 120.32 yen to the dollar in early Asian trade.

A weaker yen is a boon for companies that make the bulk of their sales abroad because it boosts profits when earnings from abroad are brought home.

Nikkei futures contracts pointed to a rise in the market. In Chicago, Nikkei futures expiring in March finished at 17,165, 85 points above their close in Osaka The Nikkei is likely to move between 16,900 and 17,200 on Monday, Takahashi said.

The benchmark rose 1.30 percent on Friday, snapping a two-day losing streak as technology firms gained after the yen hit its lowest point against the dollar in more than a year.

U.S. stocks rose for a third day on Friday, with the Dow Jones industrial average hitting another record high close, its 24th since October, while the Nasdaq Composite Index posted a fresh six-year high and saw its best weekly percentage gain since mid-September.

The Dow rose 0.33 percent to end at 12,556.08. The Nasdaq was up 0.72 percent Core machinery orders rose a weaker-than-expected 2.8 percent in October from the previous month, raising doubts about the strength of Japan's corporate sector.

STOCKS TO WATCH --Sharp Corp. T> The electronics maker said on Friday it would aim to boost operating profit by 10 percent next business year, in line with market expectations, helped by higher sales of liquid crystal display TVs and solar cells.

-Canon Inc.

The digital camera and office equipment giant said on Friday it will buy out Toshiba Corp. in their flat-panel display venture to resolve a patent dispute with U.S. firm Nano-Proprietary Inc.

-- Honda Motor Co. T> Honda Siel Cars India Ltd. said on Sunday it would build a second Indian plant in the northern state of Rajasthan, with initial annual capacity of 50,000 units, and make a small car for sale in India.

--NEC Corp. T> The electronics conglomerate said on Friday it has been asked by the Tokyo Stock Exchange to submit a report on steps to improve its disclosure practices after it was forced to correct its earnings due to accounting errors.

-- Japan Airlines Corp.

The airline said on Sunday it planned to ask for some 60 billion yen (0 million) in borrowing from financial institutions during the business year that ends on March 31, but denied a newspaper report it was seeking 200 billion yen in financing.

-- Nikko Cordial Corp. T> Canadian investment group Mackenzie Financial Corp. has taken a 5.74 percent stake in Nikko, according to a regulatory filing submitted on Friday.

Mackenzie also submitted filings showing it has taken a 6.13 percent stake in television broadcaster TV Asahi Corp. while raising its stake in consumer lender Takefuji Corp. to 6.99 percent from 5.51 percent.

-- Fujiya Co. T> A number of major supermarket operators including Tokyu Store Chain Co., Keio Store Co. and Keikyu Store Co. have removed Fujiya's products from their shelves after Fujiya admitted last week to shipping cream puffs made from expired milk, the Nikkei newspaper reported on Sunday.

-- Tokai Tokyo Securities Co. Ltd. and Yamaguchi Financial Group Inc. T> Tokai Tokyo Securities, a mid-sized brokerage, and Yamaguchi Financial, a regional lender, agreed on Friday to explore a possible joint venture in securities broking.

-- Sapporo Hokuyo Holdings Inc. T> The northern Japan-based lender said on Friday it would complete its consolidation by combining the two banks under its umbrella, Sapporo Bank and Hokuyo Bank.

-- Sato Restaurant Systems Co. Ltd. and Friendly Corp. OS> The two restaurant operators announced on Friday that they have agreed to merge on Oct. 1.

Reuters AD VP0618