Nikkei set to rise as yen pulls back, Fed stimulus concerns ease
TOKYO, June 10 (Reuters) - Japan's Nikkei share average is expected to rebound sharply on Monday, as short-covering on exporters on the back of a weaker yen is likely to further move the index away from bear territory it reached last week. The U.S. dollar rose on Friday on resilient U.S. jobs data, while Wall Street rallied as investors came round to the view that the Federal Reserve would need to see firm evidence of economic strength before scaling back its massive bond-buying program. Market players said the Nikkei was likely to trade between 13,050 to 13,350 on Monday after falling 0.2 percent to 12,877.53 on Friday. It dropped as low as 12,548.20 during intraday trade on Friday, which marked a 21 percent slide from a 5-1/2 year peak hit on May 23, leaving the index in bear market territory. Nikkei futures in Chicago closed at 13,220, up 4.3 percent from the close in Osaka of 12,680. Japanese equities tumbled over the past two weeks, with trading characterised by volatile price moves, as investors were spooked by worries over slowing growth in China, and uncertainty over whether the Fed would roll back its stimulus this year. Analysts said that exporters and financials may attract buyers as they were looking cheap after the heavy selling recently. "After the index rises to around 13,300, buying may slow down, but sentiment should stay positive throughout the day," said Yutaka Miura, a senior technical analyst at Mizuho Securities. He said that market sentiment will get a boost after the dollar recovered from a two-month low it hit against the yen on Friday. It was last trading at 98.30 yen. On Friday, the U.S. Labor Department's data showed job gains of 175,000 in May, slightly above the economists' forecast. But the unemployment rate increased to 7.6 percent from 7.5 percent in April, easing concerns that the Fed may be reducing its stimulus in the near future, boosting U.S. stocks. Miura also said the mood has improved since the Government Pension Investment Fund (GPIF) said after Friday's closing bell that it would lift its weighting in foreign and domestic stocks. > Wall St rallies after U.S. jobs data, ends up for week > Dollar rebounds as U.S. jobs data shows economic resilience > U.S. bonds drop on renewed bets of less Fed buying > Gold falls 2 pct as U.S. jobs data dims stimulus hope > Oil gains $1 as U.S. equities rally on jobs data STOCKS TO WATCH --SoftBank Corp Softbank is in talks with Deutsche Telekom AG DTEGn.DE over a possible deal for T-Mobile US Inc TMUS.N, as the Japanese company looks for alternatives to enter the U.S. wireless market if its $20.1 billion deal with Sprint Nextel Corp S.N falls apart, according to three sources familiar with the situation on Friday. --Toshiba Corp Westinghouse Electric Co., Toshiba's U.S. nuclear power unit, will likely win a 10 billion dollar contract to build two nuclear reactors in the Czech Republic, the Nikkei reported. --Marubeni Corp Marubeni is in advanced talks to leave the energy business of Gavilon out of its planned takeover of the U.S. agriculture merchant, two sources with direct knowledge of the deal said on Friday.