Nikkei likely to edge down as economic doubts reignited

TOKYO, June 17 (Reuters) - Japan's Nikkei stock average is
likely to edge lower on Wednesday after mixed U.S. indicators
reignited doubts about how fast the recession is easing, with
exporters under pressure from a stronger yen.

A rebound in U.S. housing starts in May pointed to some
stabilisation in that sector, but industrial production fell 1.1
percent and capacity utilisation slumped to its lowest level on
records dating back to 1967. [ID:nN16262919]

The benchmark Nikkei fell 2.9 percent on Tuesday for its
worst day in more than two months, and while market analysts said
further falls were likely there was little change in the overall
rebound trend.

"The economy is definitely improving -- after all, the Nikkei
rose as far as 10,000 from just over 7,000 in March, which is
quite substantial," said Yoku Ihara, manager at the investment
information department of Retela Crea Securities.

"What we're seeing now is just the market taking a natural
break."

Others noted that despite some worry about U.S. indicators
and whether the recession is easing, financial institutions and
credit markets are in better shape than when global stock markets
slid to their lows earlier this year, and so no substantial falls
are expected.

Market analysts said the Nikkei .N225 is expected to move
between 9,600 and 9,800, with support from the 25-day moving
average around 9,560. It closed at 9,752.88 on Tuesday.

Pointing to a lower open, Nikkei futures traded in Chicago
2NKc1 edged down 0.4 percent from the Osaka close of 9,770
JNIc1.
----------------------MARKET SNAPSHOT @ 2252 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 925.58 0.2% 1.860
USD/JPY JPY= 96.49 0.1% 0.100
10-YR US TSY YLD US10YT=RR 3.6491 -- 0.000
SPOT GOLD XAU= 933.5 -0.06% -0.600
US CRUDE CLc1 70.16 -0.44% -0.310
DOW JONES .DJI 8504.67 -1.25% -107.46
-------------------------------------------------------------
> Wall St hit by economic, consumer jitters [.N]
> Dollar slides after Russia comments, BRIC summit [USD/]
> Bonds ride Wall Street selloff higher [US/]
> Gold rises as dollar's reserve status in focus [GOL/]
> Oil slips on dollar, U.S. industrial data [O/R]
STOCKS TO WATCH

-- Sanyo Electric Co 6764.T

Sanyo said car makers in the United States, Japan and Europe
have agreed to buy its auto-use lithium-ion batteries, as it
looks to take advantage of growing demand for hybrid cars.
[ID:nT56632]

-- Daiwa Securities Group Inc (8601.T)

Daiwa, Japan's second-largest broker, will buy a real estate
management unit of KK DaVinci Holdings 4314.OJ to expand its
property business, three sources familiar with the matter said.
[ID:nT12212]

The Nikkei business daily reported that Daiwa would invest 10
billion yen in the deal. [ID:BNG463691]

-- Honda Motor Co (7267.T)

Honda plans to periodically issue asset-backed securities in
the United States to accommodate the expected recovery in car
sales and longer-term funding needs, the Nikkei business daily
said. [ID:nBNG500090]
(Reporting by Elaine Lies; Editing by Chris Gallagher)