Nikkei likely to ease after rally, U.S. data eyed

TOKYO (Reuters) - Japan's Nikkei average is likely to ease on Monday, as investors could book profits after the index rallied nearly 8 percent last week, with concerns over the weakening global economy persisting.

One stock to watch will be Honda Motor Co, after a top executive at the car maker said it would have a tough time meeting its lowered annual profit forecasts due to an increasingly severe sales environment.

"The stock market is likely to have a breather after it rose quite a bit last week on expectations that governments' efforts would help the global economy," said Kazuhiro Takahashi, general manager at Daiwa Securities SMBC.

"Stock performance may be lacklustre this week as investors' attention will shift back to the deteriorating U.S. economy as many economic reports are due there," Takahashi said.

Market participants are eyeing a string of U.S. data this week, including monthly employment data on Friday.

They expect the Nikkei to move between 8,200 and 8,600 on Monday.

The Nikkei average rose 1.7 percent on Friday to 8,512.27. It jumped 7.6 percent last week, its best weekly performance in a month.

Nikkei futures traded in Chicago closed at 8,515 on Friday compared to the Osaka close of 8,520.

----------------------MARKET SNAPSHOT @ 2311 GMT ------------

LAST PCT CHG NET CHG

S&P 500 896.24 0.96% 8.560

USD/JPY 95.5 0.01% 0.010 10-YR US TSY YLD 2.9217 -- 0.000

SPOT GOLD 816.7 0.46% 3.700

US CRUDE 53.55 -1.62% -0.880

DOW JONES 8829.04 1.17% 102.43

------------------------------------------------------------- > Wall St gains in thin trade, S&P up 12 pct for week > Dollar rises vs euro amid risk aversion, thin volume > Bonds surge as economic worries spur safe-haven bid > Gold gains with equities in thin holiday trade > Oil rises on short-covering; down 20 pct in Nov

STOCKS TO WATCH

-- Toyota Motor Corp and other automakers

Sales of new cars in Japan are likely to skid to a 34-year low for 2008 as the economic slump takes its toll on consumer spending, the Nikkei business daily reported on Saturday.

-- Honda Motor Co

Honda will have a tough time meeting its lowered annual profit forecasts due to an increasingly severe sales environment that is forcing carmakers everywhere to scale back output, a top executive said on Friday.

-- Morimoto Co Ltd

Apartment developer Morimoto said on Friday it had filed for bankruptcy protection with $1.7 billion in debt, joining a growing list of victims of a sharp downturn in the property market and tighter credit conditions.

-- Sumitomo Trust & Banking Co Ltd, Mizuho Trust & Banking Co Ltd

Citigroup Inc plans to sell NikkoCiti Trust and Banking Corp, its trust bank unit in Japan, as part of its global restructuring efforts, Japanese media reports said on Sunday. Major Japanese trust banks such as Mitsubishi UFJ Trust and Banking Corp, Sumitomo Trust & Banking Co, and Mizuho Trust & Banking Co, are likely to make bids for the Citigroup unit, the Nikkei business daily said.

-- Showa Shell Sekiyu KK

Showa Shell Sekiyu KK said on Friday it would cut its crude refining volume by 100,000 kilolitres (630,000 barrels) in November-December from its original plan in response to declining demand at home.

-- Idemitsu Kosan Co

Idemitsu Kosan Co, Japan's third-biggest oil refiner, said on Friday it would cut its October-December crude oil refining volume further amid slowing oil demand.

-- Mitsui & Co Ltd

Trading house Mitsui & Co has asked for the U.S. Federal Reserve's new commercial paper (CP) buying facility to buy its dollar-denominated CP, local media reports said on Sunday.

-- Nomura Holdings Inc

Struggling restaurant chain operator Skylark Co will sell more than 40 billion yen worth of new shares to Nomura Principal Finance Co, a unit of Nomura Holdings, the Nikkei business daily said on Saturday.

With financial support from the Nomura group, Skylark plans to shut down some locations and switch to a lower-priced restaurant chain to revive itself, the Nikkei said.

-- Juroku Bank Ltd, Gifu Bank Ltd

Juroku Bank will inject capital into Gifu, a struggling bank, possibly setting the stage for a merger of the two Gifu Prefecture-based banks, the Nikkei business daily said on Saturday.

-- Kyowa Hakko Kirin Co

Kyowa Hakko Kirin plans to begin volume production of an antibody-based leukemia drug as early as 2013, the Nikkei business daily said on Saturday.

The company, which is majority-owned by Kirin Holdings Co, will invest about 10 billion yen by 2010 in infrastructure, including a production wing at its plant in Gunma Prefecture, the Nikkei said.

-- Shinsei Bank

Shinsei Bank, the biggest stake holder of Taiwan's Jih Sun Financial, will invest T$10 billion in the Taiwan bank via a rights issue, Jih Sun said on Friday.

-- NTT DoCoMo Inc

Carlyle-controlled firm Willcom Inc will launch low-priced mobile data services using NTT DoCoMo's networks in early 2009, the Nikkei business daily reported.

(Reporting by Rika Otsuka)