Nikkei seen edging down as poor U.S. econ data sours sentiment
TOKYO, Dec 4 (Reuters) - Japan's Nikkei share average is set to edge down on Tuesday, trimming gains from a seven-month closing high in the previous session after Wall Street eased on weak U.S. economic data. Manufacturing activity in the United States surprisingly contracted in November, dropping to its lowest level in more than three years. But analysts said that selling should be limited as a weak yen will likely keep foreign investors buyers in the market. The Nikkei was likely to trade between 9,400 and 9,500, they said, while Nikkei futures in Chicago closed at 9,440, down 20 points from the Osaka close of 9,460. On Monday, the index closed up 0.1 percent at 9,458.18 after rising as high as 9,525.82. "Investors are cautious about the market's sharp rise in the past few weeks, and as soon as the Nikkei hit the 9,500-mark, trading has slowed down. Investors started taking a wait-and-see mode," said Hiroichi Nishi, general manager at SMBC Nikko Securities. Immediate support could be expected at the 5-day moving average at 9,407.34, Nishi said. During the past 2-1/2 weeks, the benchmark has rallied 9.2 percent, led by exporters, and the yen has fallen on speculation the Bank of Japan will be pushed to adopt aggressive policy action after the Dec. 16 election. The leader of the main opposition Liberal Democratic Party, Shinzo Abe, has been calling for the Bank of Japan to take bolder action, including setting a 2 percent inflation target and embarking on "unlimited easing". The LDP is expected to win the most seats and form the government after the election. The currency was trading at 82.18 yen to the dollar on Tuesday, down from its 7-1/2-month low of 82.84 touched on Nov. 22 but still above the 82 yen threshold. A fall below this level could trigger selling in the equities market. The broader Topix was flat at 781.73 on Monday. > Wall St sours on weak domestic factory data > Euro climbs to 6-week high vs dollar; Spain seeks help > Bond prices dip on Spain aid, Chinese data > Gold up on dollar dip, mixed manufacturing outlook > Brent oil falls as weak US data offsets China optimism STOCKS TO WATCH --Toyota Motor Corp Toyota's U.S. November industry auto sales rose 14.4 percent from the previous year, the company said. --Sharp Corp Sharp and Qualcomm Inc reached a deal to jointly develop an energy-efficient LCD panel for smartphones using the Japanese company's display technology, the Nikkei reported.
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