Nikkei set to fall after dollar drops below 90 yen

TOKYO, Sept 28 (Reuters) - Japan's Nikkei average is likely
to fall on Monday, with exporters seen hurt by a sharply stronger
yen and after U.S. stocks slipped on disappointing housing and
durable goods data, which fuelled worries about the strength of a
U.S. recovery.

The U.S. dollar slid to as low as 88.46 yen JPY= in early
Asian trade on Monday, with traders saying chart players and
speculators were pushing the yen higher, taking its end below 90
yen in New York on Friday as a sign to sell. [FRX/]

"Many exporters have set their currency rate assumption at
90-95 yen, and if the dlr/yen were stay below 90 yen, the impact
on their earnings would be huge and that's a concern," said
Yutaka Miura, senior technical analyst at Mizuho Securities.

"The stock markets have been reacting more to negative news
than to positive news recently, and that's also capping further
gains and providing ground for profit-taking."

Sanyo Electric Co Ltd 6764.T may draw attention after the
company said it is likely to post a net loss for the year to
March, instead of its previous estimate to break even, as costs
for its voluntary retirement scheme and a product recall weigh.
[ID:nT164704]

Nikkei futures traded in Chicago 2NKc1 ended Friday at
10,200, down 1.1 percent from the Osaka close JNIc1, pointing
to a lower start.

The benchmark Nikkei .N225 is likely to move between 10,100
and 10,350 on Monday, market players said. It slid 2.6 percent on
Friday to end at 10,265.98.

In a holiday-shortened week, the Nikkei slipped 1 percent
last week, although it had gained 16 percent since the beginning
of the year.

The S&P 500 Index .SPX slipped 0.61 percent after economic
reports showed that new orders for long-lasting U.S. manufactured
goods fell by their biggest margin in seven months, while August
sales of new home fell short of Wall Street's expectations. [.N]
----------------------MARKET SNAPSHOT @ 2304 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1044.38 -0.61% -6.400
USD/JPY JPY= 88.77 -0.93% -0.830
10-YR US TSY YLD US10YT=RR 3.3202 -- 0.000
SPOT GOLD XAU= 990.95 0.00% 0.000
US CRUDE CLc1 66.36 0.51% 0.320
DOW JONES .DJI 9665.19 -0.44% -42.25
-------------------------------------------------------------
> Recovery angst, RIM's results hit Wall Street [.N]
> Dollar slides to 8-mth low vs yen [USD/]
> Weak data, stern Fed propel long-dated bonds [US/]
> Gold ends down on slow physical demand [GOL/]
> Oil price gains on Iran, consumer data [O/R]
STOCKS TO WATCH

-- Sumitomo Forestry Co (1911.OS)

Sumitomo Forestry has acquired an interest in Australia's
fourth-ranked homebuilder, Henley Properties Group, aiming to
make an full entry into that nation's growing housing market, the
Nikkei business daily reported on Monday.
-- Toyota Motor Corp (7203.T)

Toyota raised its global sales forecast for the year to March
2010 by 3 percent to 6.7 million cars, the Tokyo Shimbun daily
reported on Saturday, in the latest sign of a nascent recovery in
auto demand. [ID:nT231749]

Separately, the Nikkei business daily reported on Saturday
that New United Motor Manufacturing Inc (NUMMI), a joint venture
between Toyota and the former General Motors Corp [GM.UL] in
California, will shed its entire workforce of about 4,700 by next
spring. [ID:nT238313]

-- Astellas Pharma (4503.T)

Astellas, Japan's second-largest drugmaker, said the U.S.
Food and Drug Administration has approved a six-month extension
of patent protection for its prostate drug Flomax under its
pediatric exclusivity rules. [ID:nT166279]
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)