Nikkei expected to extend losses on China, Fed worries
TOKYO, June 25 (Reuters) - Japan's Nikkei share average is set to trade below 13,000 on Tuesday, as sentiment remains depressed by worries about stress in China's banking system and the U.S. Federal Reserve's plans to roll back its stimulus later this year. Traders expect the weaker yen to help limit the downside. Market players said the Nikkei was likely to trade between 12,900 to 13,200 on Tuesday after falling 1.3 percent to 13,062.78 on Monday. Nikkei futures in Chicago closed at 13,020, up 0.08 percent from the close in Osaka of 13,010. The benchmark Nikkei has dropped 18 percent since reaching a 5-1/2-year high on May 23, hurt by slowing growth in China, Fed stimulus concerns and disappointment over the Japanese government's recently unveiled growth strategy. Analysts say the mood is likely to remain subdued as a recent spike in interbank borrowing costs have raised fears that stress in China's banking system could weigh on already slowing growth. "As the Japanese market dropped on the China concern the day before, it may not see a big sell-off today, but investors are hesitant to take positions, and low volume is reflecting their risk-averse stances," said Kenichi Hirano, a strategist at Tachibana Securities. On Monday, there were only 1.63 billion shares changing hands on the Topix, the lowest level since mid-December. Analysts also said that the market remains under pressure on concerns that U.S. monetary stimulus will be scaled back in the near term. "There are few negative factors in the domestic market, but global worries are keeping investors from taking positions," Hirano said. Market players, however, expect losses to be contained as the dollar is trading around 97-98 yen, which is higher than the 90-95 yen range that most companies have based their earnings for this fiscal year. A weaker yen lifts exporters' competitiveness in overseas markets and their earnings when repatriated. > Wall Street ends down but off lows as bond prices gain > Dollar up on view Fed may end easing sooner than expected > Treasuries rebound, yields fall from near 2-yr highs > Gold down 1 pct on China fears, Wall St margin calls > Oil ends up, off 3-week low as Canada floods threaten US imports STOCKS TO WATCH --Panasonic Corp Panasonic's solar cell sales volume will grow 25 percent on the year to 675,000kw for fiscal 2013 as more households and stores respond to rising electricity rates by installing solar panels, the company said Monday.