Nikkei set to fall, pressured by Spanish bank concerns

TOKYO, May 18 (Reuters) - Japan's Nikkei share average is
set to fall on Friday, breaking through the next support level
as concerns about the health of Spain's banking system and a
stronger yen compound an already bearish climate.
Market players said the Nikkei was likely to trade between
8,650 and 8,750 on Friday, smashing through the 8,800 support
level after Nikkei futures in Chicago closed at 8,680,
down 1.9 percent from the close in Osaka of 8,850.
"Even though Japanese stocks are reasonably priced at the
moment, fears about Europe are intensifying, and the strong yen
won't help matters," said Hiroichi Nishi, equity general manager
at SMBC Nikko Securities.
Spain's borrowing costs leapt at a bond auction on Thursday,
with three- and four-year bond yields reaching around 5 percent,
well above the last auction, after official data showed the
country was back in recession.
A report in a Spanish daily that customers had withdrawn
more than 1 billion euros from troubled Spanish lender Bankia
over the past week, although denied by the government, added to
concerns about the health of the country's banking system as
Moody's Investors Service cut the ratings of 16 Spanish banks.
Fitch also downgraded Greece's credit rating to triple C
from B- on Thursday, pushing it further into "junk" territory on
the heightened risk that the country might have to leave the
euro zone.
Exporters were likely to be hammered by a stronger yen, with
the euro at around 100 yen and the dollar down at 79.37 yen
after U.S. stocks skidded overnight and the S&P 500 hit a
four-month low in its fifth consecutive day of losses.
The Nikkei rebounded yesterday to 8,876.59, as investors
bought up cheap Japanese stocks, cheered by positive domestic
GDP data.
But market analysts said risk appetite was likely to fall on
the last day of trading before the weekend after data showed
claims for jobless benefits in the U.S. remained the same last
week and the euro zone crisis showed no sign of easing.
The Nikkei has fallen 13 percent since a high of 10,255.15
on March 27, dragged down by Europe's woes, concerns about a
stuttering recovery in the United States and slowing growth in
China.

> Nervous investors send S&P lower for fifth day
> Yen advances; Greece, Spain woes slam euro
> Bonds climb on weak data, Europe worries
> Gold rallies from rout on technicals; dead-cat bounce?
> Oil skids on euro zone woes, weak economic data
STOCKS TO WATCH
- RAKUTEN INC
Rakuten said it has acquired a large number of shares of
Pinterest, a popular U.S. online scrapbooking website. The
online shopping website likely spent 4-5 billion yen to purchase
some of the $100 million worth of shares issued by Pinterest,
according to the Nikkei business daily.
-NIPPON YUSEN KK
Nippon Yusen is to extend the lives of some liquefied
natural gas carriers by five to seven years, pushing up its
operating earnings an estimated 10 billion yen this fiscal year
due to reduced depreciation costs, said the Nikkei business
daily.
-FUJI HEAVY INDUSTRIES
Subaru, a unit of Fuji Heavy Industries Ltd, announced a $75
million expansion of its Indiana plant, increasing production by
15 percent in response to growing demand for its Outback
crossover vehicle and Legacy car.