Tokyo stocks seen falling further on Wall St, yen

Tokyo, Aug 17: Tokyo shares are seen set for another roller-coaster session on Friday with exporters such as Sony Corp. hit again after the U.S. Dow fell amid concerns about credit markets and the fallout on the economy and the yen hit 14-month high against the dollar.

One focus in the market may be Japanese department stores Isetan Co. Ltd. and Mitsukoshi Ltd.

Japan's No.4 Mitsukoshi and fifth-ranked Isetan have agreed to merge operations under a holding company as early as next spring, becoming the country's biggest department store group, the Nikkei business daily said on Friday.

''Intraday trade will likely be pretty volatile, and I wouldn't be surprised if the Nikkei broke below 16,000 again. A feeling of panic is still present in the market,'' said Tsuyoshi Segawa, an equity strategist at Shinko Securities.

''But investors may regain composure towards the end of trade, mostly because the Tokyo market has gone down way too much. This is a kind of daily movement that you often see when the market is bottoming out.'' On Thursday, the broader TOPIX index lost 1.67 percent to end at 1,567.46, the lowest close since November 2006. The technology-laced Nikkei average also ended at its lowest since November, shedding 1.99 percent to 16,148.49, after going below 16,000 in early afternoon trade.

Segawa said a feeling of panic and unrest among investors will likely remain for a while, but from a technical point of view, both the U.S. and Japanese markets have already fallen about as far as they are likely to go.

Nikkei futures traded in Chicago finished the previous session at 15,950.00, 100 points below the Osaka close pointing to a lower opening.

In New York on Thursday, the dollar was 2 percent lower at 114.20 yen in late afternoon trading. Early on Friday the dollar was around 113.70 yen.

Market participants said the Nikkei would likely trade between 15,900 and 16,200 on Friday.

The Dow Jones industrial average declined 0.12 percent to end at 12,845.78, though a remarkable late-day surge almost brought it back into the black.

Stocks To Watch

-- Fujitsu Ltd. T> Fujitsu said on Thursday it has won a 100 billion yen (3.3 million) contract from global media company Reuters Group Plc to administer the British company's personnel management and accounting systems for 10 years.

-- Nichirei Corp. T> Nichirei said on Thursday it will raise wholesale prices of frozen food and other processed food items by 10-15 percent beginning Oct 1. The firm said the price hike reflects increase in costs for packages and fuels as well as meat.

--Tomy Co. T> Japanese toy maker Tomy said on Thursday it will voluntarily recall Mattel Inc.'s die-cast cars following the U.S. toy giant's massive recall of toys made in China due to concerns about lead paint.

Reuters>