TOKYO, Aug 15 (Reuters) A wave of credit worries that hit US stocks overnight and a stronger yen ar

TOKYO, Aug 15 (Reuters) A wave of credit worries that hit US stocks overnight and a stronger yen are seen dragging down Tokyo stock market on Wednesday, with selling of exporters and financial shares such as Mitsubishi UFJ Financial Group Another focus in the market may be Fujitsu after news that its 460 million euro ($626.3 million) takeover bid for France's GFI Informatique failed on Tuesday, leaving the Japanese electronics group looking for other acquisitions in Europe.

''The Nikkei average is likely to test its downside, possibly falling to the 16,600 level, as it became clear that credit concerns stemming from subprime problems is still strong. And there is the stronger yen,'' said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.

U.S. stocks skidded on Tuesday on fresh signs of concern about global credit markets after Sentinel Management Group Inc., which oversees about $1.6 billion in assets, told clients it wants to stop investors from withdrawing their cash to avoid forced liquidation.

Nishi said financial stocks are likely to be sold due to problems in the U.S. subprime mortgage sector, although Japanese banks are unlikely to sustain much damage.

Nikkei futures traded in Chicago finished the previous session at 16,615.00, 225 points below the Osaka close pointing to a lower opening.

In New York on Tuesday, the euro was down 1 percent against the yen at 159.26 yen while the dollar was down 0.5 percent at 117.63 yen.

Market participants said the Nikkei would likely trade between 16,500 and 16,700 on Wednesday.

The benchmark finished Tuesday up 0.3 percent at 16,844.61.

The Dow Jones industrial average tumbled 1.57 percent to end at 13,028.92 on Tuesday.

STOCKS TO WATCH -- Mitsubishi UFJ Financial Group Inc. (MUFG) T> MUFG, Japan's largest bank, said on Tuesday it suffered an appraisal loss of 5 billion yen ($42.42 million) on its investment in U.S. subprime loan-related financial products. Its outstanding balance of investment in such products stood at 280 billion yen as of the July, MUFG said.

Sumitomo Mitsui Financial Group Inc. (SMFG) also announced its exposure to the U.S. subprime loan market. Japan's third-largest bank said it booked a loss of ''billions of yen'' in the April-June quarter through its sale of 350 billion yen worth of mortgage-backed securities.

SMFG's exposure to such financial products was reduced to 100 billion yen as of the end of June, the bank said.

-- Matsushita Electric Industrial Co. Ltd.

Nokia on Tuesday warned consumers that 46 million batteries used in its mobile phones could overheat and offered to replace them free while it negotiates with battery maker Matsushita over who would bear the costs.

-- Seiyu Ltd.

Wal-Mart Stores Inc.'s Japanese retail unit Seiyu Ltd. said it now expects to post its sixth straight annual loss in 2007 on sluggish sales, but dismissed speculation that the results would prompt Wal-Mart to pull out of Japan.

-- Asahi Glass Co. Ltd. T> Asahi Glass Co. Ltd. is selling its unit Asahi Fiber Glass Co. Ltd. to the Development Bank of Japan (DBJ), as it slims down to better compete with Corning Inc., sources familiar with the deal told Reuters.

-- Property developers The Pension Fund Association will begin investing in property development projects from the fiscal year starting next April 1, allocating as much as 650 billion yen to help build office buildings and other commercial properties, the Nikkei business daily said on Wednesday.

-- Oki Electric Industry Co. T> Oki plans to more than triple output of automatic teller machines in China from August to meet growing demand, the Nikkei business daily reported on Wednesday.

Reuters KK SBA VP0505