Nikkei may hold steady, focus turns to BOJ's Tankan survey
TOKYO, July 1 (Reuters) - The Nikkei average may hold steady on Monday after posting its biggest one-day rise in three weeks in the previous session, though the early focus for investors will be on the Bank of Japan's Tankan survey to gauge the impact of the government's sweeping stimulus policies. The Nikkei is likely to trade between 13,500 and 13,750, strategists said, after jumping 3.5 percent to a three-week high of 13,677.32 on Friday. The broader Topix index advanced 3.2 percent to 1,133.84 in the previous session. Nikkei futures in Chicago closed at 13,700 on Friday, up 0.4 percent from the Osaka close of 13,640. "We had a big rebound in the Nikkei last Friday, so we may see some profit-takings. I think there was some window dressing last Friday as it was month-end and quarter-end," said Takashi Hiroki, chief strategist at Monex Inc. A weaker yen should offer support to the equity market. The Japanese currency was last traded at 99.34 yen to the dollar as investors resumed pricing in the possibility of the U.S. Federal Reserve beginning to scale back its bond-buying programme as soon as its September policy meeting. Hiroki said investors would focus on the BOJ's quarterly Tankan survey of business sentiment, which is due to release shortly before the market opens. "If we can confirm steady corporate investment plan, that will be a positive factor to the market," he said. The Nikkei rallied more than 80 percent to a 5-1/2 year peak on May 23 since November, when prime minister Shinzo Abe's election campaign promised bold fiscal and monetary expansionary policies to revive the world's third-largest economy, dubbed "Abenomics." But since then, the benchmark has lost 14 percent on concerns over the Fed paring its stimulus, slowing growth in China - Japan's second-largest export market, and disappointment over Abe's growth strategies. Japanese equities' 12-month forward price-to-earnings ratio fell to 13.3 - a level not seen since early April - from a three-year high of 16.3 reached four weeks ago according to Thomson Reuters Datastream. The Nikkei is still up nearly 11 percent since the Bank of Japan announced radical monetary stimulus on April 4 and has risen almost 32 percent this year. > S&P 500 posts best first half since 1998 > Dollar rises on talk of cutback in Fed easing by Sept > Benchmark Treasuries dip as volatile quarter ends > Gold posts worst quarter on record despite rally Friday > Brent posts 3rd straight quarterly loss STOCKS TO WATCH --SONY CORP Sony, which is studying a partial spinoff of its studio at the urging of major shareholder Daniel Loeb, suffered its second box office misfire of the summer season when its action movie "White House Down" opened with ticket sales below industry forecasts. --LIXIL GROUP Lixil, a housing facilities manufacturer, said on Friday it will buy toilet and plumbing facilities maker ASD Americas Holding Corp (American Standard) for $542 million. --HONDA MOTOR CO Honda's U.S. subsidiary will recall more than 143,000 subcompact cars to replace faulty window switches that pose a potential fire hazard, the Japanese automaker said Friday.
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