Tokyo stocks may drop after Wall Street fall

TOKYO, Aug 28 (Reuters) Japanese stocks are seen heading lower on Tuesday following falls on Wall Street and a stronger yen, with high-tech exporters such as Sony Corp and bank shares likely to be sold amid concerns about the U.S. economy.

Yutaka Miura, a deputy manager in the equity information department at Shinko Securities, said the market is likely to open lower on the impact of Wall Street and the firmer yen, but then expected to mostly drift.

''What we're seeing today is the exact opposite of what we had yesterday. Exporters will be down and then we'll see banks go down as well, but they'll mainly just be dragged down by the rest of the index rather than moving on specific factors, such as what happened in the U.S.,'' he added.

Little impact was seen from Japanese Prime Minister Shinzo Abe's cabinet reshuffle on Monday, with the market likely to watch movements in the yen.

''We'll start off with selling, but there's no sense that the market will simply keep going down and down, and trade is likely to be quiet,'' said Hiroichi Nishi, a general manager of equity marketing at Nikko Cordial Securities.

Shares of banks, brokers and mortgage lenders fell in the United States after Goldman Sachs slashed its earnings forecast for Lehman Brothers, Bear Stearns and Morgan Stanley, but Tokyo dealers said the direct impact of this on Japanese shares would be limited.

The Nikkei was seen moving between 16,100 and 16,400 yen.

Nikkei futures finished the day in Chicago at 16,300.00, down 10 points from the previous day's Osaka close.

The dollar edged down around 0.2 percent against the yen in New York and was trading around 115.57 in early Asian hours.

The Nikkei inched up 0.3 percent in thin trade on Monday, and trade on Tuesday was expected to be quiet as well.

U.S. stocks fell on Monday after data showed the number of unsold homes hit the highest in more than 15 years in July, adding to concerns about the housing market and consumer spending.

The Dow Jones industrial average was down 0.42 percent at 13,322.13.

STOCKS TO WATCH -- Nippon Telegraph and Telephone Corp Japan's top fixed-line phone operator has begun developing low-cost, two-way terminals for tracking vehicles and parcels and plans to have the new service in practical use in three years, the Nikkei business daily reported on Tuesday.

The terminals will be a successor to the pager service terminated in March by NTT DoCoMo Inc, the paper said.

-- Square Enix Co, Nintendo Co Ltd Japanese videogame publisher Square Enix said on Monday it would delay the launch of the latest version of its ''Dragon Quest'' game for Nintendo's DS portable game machine to sometime next year.

Square Enix had originally planned to begin selling ''Dragon Quest IX'' in 2007. The delay means it will now miss the key year-end shopping season.

-- Pigeon Corp Pigeon, a maker of baby care goods, revised up on Monday its full-year net profit forecast to 1.7 billion yen from 1.6 billion yen, citing robust growth in China and North America and a softer yen.

For the year ending January, Pigeon also lifted its sales projection to 48.8 billion yen from 48.4 billion yen.

-- Fujitsu Ltd Fujitsu said on Monday it would spin off its shared technology and design divisions, which will take on more product design and assembly work at client electronic firms outside the Fujitsu group.

-- Sekisui House Ltd.

Home builder Sekisui House said on Monday the government has ordered it to suspend sales operations in four prefectures for 15 days from Sept. 11 for breach of the construction law.

-- Dydo Drinco Inc Dydo Drinco said its soft drink sales in the month ended on Aug. 20 rose 6 percent from a year earlier, boosted by an unusually hot summer.

-- Lion Corp The household products maker said it would voluntarily recall its insecticide sprays after reports of fire incidents caused by the products' inflammable gas. The firm said it had sold 3.3 million units since their introduction in March.

Reuters RKM VP0515