Nikkei set to dip; yen, earnings eyed

TOKYO (Reuters) - Japan's Nikkei is seen dipping Monday, with a strong yen hurting market confidence, while the ruling Liberal Democratic Party's loss in a Tokyo election and caution ahead of U.S. earnings releases is likely to add to a wait-and-see mood.

Kirin Holdings Co (2503.T) and other drinks makers are set to be in focus after the Nikkei business daily said Kirin and smaller unlisted rival Suntory Ltd are in talks to merge and create one of the world's largest beverage and food firms.

"Many technical signals suggest that the Nikkei may have been oversold, but it is difficult for investors to buy as the yen remains strong," said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.

The benchmark Nikkei .N225 closed Friday down 3.78 points at 9,287.28, extending its decline to the eighth straight day.

A fall on Wall Street on Friday that came after Chevron Corp (CVX.N) warned about its quarterly results and a drop in consumer confidence is also expected to weigh on the Nikkei. .N

Market players expect the Nikkei .N225 to move between 9,100 and 9,300 on Monday.

Against the dollar, the yen rose to a fresh five-month high below 91.80 yen on Friday amid fears of weak U.S. corporate profits and fading hopes for a global recovery.

(Reporting by Shinichi Saoshiro; Editing by Edwina Gibbs)