Nikkei seen boxed in range ahead of central bank meetings

TOKYO, Aug 1 (Reuters) - Japan's Nikkei share average was
expected to open weak and stay boxed in a range as investors
refrain from big moves ahead of U.S. Federal Reserve and
European Central bank meetings, although earnings-led trading
could swing individual stocks.
Market players said the Nikkei was likely to trade between
8,550 to 8,700 on Wednesday after Nikkei futures in Chicago closed at 8,590, down 1 percent from the close in Osaka
of 8,680.
U.S. stocks dipped overnight in low volume as investors
speculated on whether the Fed would introduce new easing
measures after it concludes its Federal Open Market Committee
(FOMC) two-day policy meeting on Wednesday.
"More people seem to be leaning towards the idea that the
Fed will postpone easing until the next meeting, so investors
are actually looking more to the ECB for something significant,"
said Masayuki Doshida, senior market analyst at Rakuten
Securities.
The European Central Bank will meet on Thursday and are
expected to discuss policy changes to tackle a deepening euro
zone debt crisis after president Mario Draghi said last week
that the bank would do "whatever it takes" to save the euro.
Weakening demand in Europe due to the region's fiscal woes
has cast a shadow over Japan's earning season, which is now in
full swing. Several large caps have cut profit outlooks due to
the poor European market.
China's economy will also be in the spotlight on Wednesday
as both the official and the HSBC Purchasing Manager's Index
(PMI) will be announced, potentially intensifying concerns that
the world's second largest economy is slowing down.
"Komatsu and other China-dependent firms are the ones to
watch today," Doshida said.
Komatsu Ltd, a construction machinery maker
dependent on China for much of its revenue, reported on Tuesday
an 18.5 percent drop in quarterly operating profit in April-June
compared to the previous year, and cut its annual operating
profit outlook by 16.8 percent.
"China's central bank cut rates last month but it's not
helping; the Shanghai Composite index is still falling
and shows no sign of stopping," Doshida added.
The Shanghai Composite lost 5.5 percent in July and has
stooped to 40-month lows in recent sessions.
The Nikkei closed 0.7 percent up on Tuesday to 8,695.06,
edging above the 50 percent retracement of its rally from June 4
to July 4, but it still lost 3.5 percent on the month, its worst
July performance in five years.
In contrast, the S&P 500 advanced 1.3 percent in July and is
now 10 percent up on the year, while the Dow ended the month 1
percent up.

> Wall St dips as traders gear up for Fed; ends July up
> Euro up vs dollar before Fed, ECB, but investors wary
> Prices gain as markets await central banks
> Gold eases before cenbank meetings, up for July
> Oil down 2nd day as stimulus hopes falter
STOCKS TO WATCH
-OLYMPUS CORP
Olympus shareholder Terumo Corp said after close on
Tuesday it had filed a lawsuit against the camera and endoscope
maker, seeking damages for lost shareholder value due to
Olympus's account scandal last year. Terumo proposed a 50
billion yen investment in Olympus last week, an offer that
Olympus then said it was considering.
-NOMURA HOLDINGS
Japan's securities investigators recommended a relatively
light penalty for Nomura Securities on Tuesday, closing out a
three-month probe into the brokerage's role in a leak of company
share issuance plans.
TOSHIBA CORP
Toshiba overshot earnings expectations on Tuesday by more
than doubling its quarterly operating profit compared to the
previous year due to strong sales of power systems and other
energy products and despite falling demand for chips.

HONDA
Honda Motor Co posted a quarterly operating profit for
April-June almost eight times larger than the same period in
2011 as its production finally recovered after a Japanese
tsunami and Thai floods to respond to pent-up demand.

PANASONIC
Panasonic Corp reported a sixfold increase in quarterly
operating profit for the April-June period, reaching 38.6
billion yen ($494 million) thanks to aggressive cost-cutting,
beating market expectations.
The company has also stopped selling televisions at a loss,
but new restructuring plans may balloon to more than the 41
billion yen already earmarked.