Nikkei set to move narrowly, eyes on yen

TOKYO, May 21 (Reuters) - Japan's Nikkei stock average is set
to move narrowly on Thursday, with a stronger yen weighing on
exporters such as Honda Motor Co (7267.T) while high tech shares
may fall in the wake of losses among their U.S. peers.

The dollar fell to its lowest in nearly five months against
major currencies on Wednesday as optimism about the economy
dampened safe-haven demand and the Federal Reserve said it mulled
buying more securities at its last policy meeting. [.N]

Sony Corp (6758.T) is set to be in focus after the
electronics maker said it plans to halve the number of its parts
and materials suppliers. [ID:nTFD003301]

"Movements in the currency market are likely to set the tone
for the stock market today, with exporters vulnerable to selling,
although the dollar's recovery to the 95-yen level will provide
support, " said Hiroichi Nishi, general manager at the equity
division of Nikko Cordial Securities.

"But the market remains above the 25-day moving average,
which will provide support around 9,000."

The dollar was holding steady against the yen at 94.84 yen
JPY=.

Tech shares may be sold as well after their U.S. peers lost
ground in the wake of a negative outlook for 2009 from
Hewlett-Packard (HPQ.N), the world's biggest PC maker.

The benchmark Nikkei .N225 is set to move between 9,200 and
9,400. On Wednesday it closed at 9,344.64 after moving in an
extremely tight range.

In a sign the market is likely to start with a negative bias,
Nikkei futures traded in Chicago 2NKc1 edged down 0.1 percent
from the Osaka close. JNIc1.
----------------------MARKET SNAPSHOT @ 2258 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 903.47 -0.51% -4.660
USD/JPY JPY= 94.89 0.03% 0.030
10-YR US TSY YLD US10YT=RR 3.1875 -- 0.000
SPOT GOLD XAU= 937 -0.01% -0.100
US CRUDE CLc1 61.51 -0.85% -0.530
DOW JONES .DJI 8422.04 -0.62% -52.81
-------------------------------------------------------------
> Wall St retreats on Fed outlook, banks sell off [.N]
> US dollar slumps to 5-month low as risk appetite returns [USD/]
> Rally on FOMC discussion of more purchases [US/]
> Gold hits 8-233k high as dollar tumbles, oil rises [GOL/]
> Oil hits 6-month high over $62 on US stockpile draw [O/R]
STOCKS TO WATCH

-- Toshiba Corp (6502.T)

Electronics group Toshiba said on Wednesday it would end
production of mobile phones in Japan in October and outsource
some output to overseas manufacturers to cut costs as demand
slumps. [ID:nT198325]

-- Kirin Holdings (2503.T)

Beer maker Kirin said on Wednesday its Australian dairy unit
National Foods has agreed to sell some of its fresh milk
operations to Italian dairy group Parmalat (PLT.MI).
[ID:nLK696719]

-- Chugai Pharmaceutical (4519.T), other flu-related shares

Chugai, which distributes the flu drug Tamiflu through its
partnership with developer Roche, and makers of medical masks and
the fabrics used for them, are likely to rise after the first
cases of H1N1 flu were confirmed in the densely-populated Tokyo
area on Wednesday. [ID:nT340230]

Other flu-related firms include Unitika Ltd (3103.T) and
Fujibo Holdings Inc (3104.T).

-- Denso Corp (6902.T)

Denso and Robert Bosch GmbH [ROBG.UL], the world's two
biggest auto parts suppliers, will scrap their joint venture to
develop and produce diesel particulate filters by the end of this
year. [ID:nTKF104393]

-- Nippon Sheet Glass (5202.T)

Nippon Sheet Glass will cut 17 percent of its workforce, or
6,700 jobs, by March 2010, up from the 15 percent it originally
announced, the Nikkei business daily said. [ID:nBNG442819]

On Wednesday, the company forecast a bigger loss this year
and said it would issue convertible preferred shares.

(Reporting by Elaine Lies;)