Nikkei set to extend Monday's sharp rise, focus turns to BOJ
TOKYO, June 11 (Reuters) - Japan's Nikkei is expected to open higher on Tuesday, ahead of the outcome of the Bank of Japan's policy meeting, building further momentum from its biggest one-day rise since March 2011 in the previous session. The Nikkei is likely to trade between 13,400 and 13,700, strategists said, after Nikkei futures in Chicago ended at 13,560 on Monday, down 0.4 percent from the Osaka close of 13,620. The benchmark briefly entered bear market territory on Friday after a fierce 2-1/2-week selloff that saw violent price moves and over a 20-percent drop since May 23, triggered by slowing growth in China and worries the U.S. Federal Reserve may scale back its massive stimulus this year. "The market may gain further if the dollar rises above 99 yen to the dollar but essentially it will likely be stuck in a range ahead of the BOJ's decision," said Toshiyuki Kanayama, market analyst at Monex Securities. The yen was last traded at 98.88 to the dollar after hitting a two-month high of 94.975 on Friday. A weaker yen helps boost profits of Japanese exporters. On Monday, the Nikkei jumped 4.9 percent to 13,514.20, holding below its 13-week moving average at 13,574.94, and the broader Topix index climbed 5.2 percent to 1,111.97. The benchmark Nikkei has fallen 15 percent since hitting a 5-1/2 year peak on May 23, but it is up 9 percent since the BOJ's sweeping monetary expansion campaign was announced on April 4 and has risen 30 percent so far this year. The focus for the session will be on the BOJ rate-setting meeting ending later Tuesday. "There could be some disappointment if the BOJ does not announce longer funding operations. Still as the Nikkei rebounded at the bottom of Ichimoku cloud on Friday, there's a sense that the market has hit a bottom already," Kanayama said. The BOJ will consider taking further steps to curb any future spike in bond yields when it debates policy on Tuesday, with the recent market turbulence threatening to derail its radical stimulus plan that relies heavily on boosting confidence to foster sustainable growth and end chronic deflation. > Wall St finishes flat as U.S. gets stable credit outlook > Dollar gains vs yen on Japan data, U.S. credit revision > U.S. bond prices slip as S&P drops U.S. rating warning > Gold up slightly after S&P raises U.S. credit outlook > Oil ends day lower, weak China demand weighs on sentiment STOCKS TO WATCH --SONY CORP, NINTENDO CO LTD Microsoft Corp said on Monday its new Xbox One console would launch in November at $499 in the United States, higher than most gamers had expected. --NIPPON STEEL & SUMITOMO METAL CORP Nippon Steel & Sumitomo Metal will build a mill for automotive steel sheet in China under a joint venture with China's Baosteel Group Corp, the Nikkei reported.
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