Japan stocks set to tumble on Wall St, oil worry

TOKYO, May 22 (Reuters) - Japanese stocks are expected to
fall sharply on Thursday, hit by a Wall Street slide on worries
about stagflation after oil surged to over $134 a barrel, with
exporters such as Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) pressured by the yen's gains
on the dollar.

One stock to watch is electronics maker Fujitsu Ltd (6702.T: Quote, Profile, Research, Stock Buzz)
after an executive said on Wednesday the company is seeking
acquisitions abroad this year to expand in software services, and
is keen on France. [ID:nSP303097]

Worries about the U.S. economy increased after the Federal
Reserve slashed its economic growth forecasts while raising
estimates for inflation, sending U.S. stocks to their biggest
loss in two weeks.

"There's no way the Nikkei can escape the impact of Wall
Street, even though the issue here really isn't worry about
inflation directly," said Nagayuki Yamagishi, a strategist at
Mitsubishi UFJ Securities.

"It's more a question of valuation -- Japanese stocks have
become expensive after their recent rises."

The Nikkei average .N225 is seen ranging from 13,600 to
14,000. It finished Wednesday at 13,926.30, its lowest close in a
week.

Nikkei futures traded in Chicago 2NKc1 closed at 13,765
compared to 13,920 at the Osaka close JNIc1.
---------------------MARKET SNAPSHOT @ 2253 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1390.71 -1.61% -22.690
USD/JPY <JPY=> 103.01 -0.02% -0.020
10-YR US TSY YLD <US10YT=RR> 3.8067 -- 0.000
SPOT GOLD <XAU=> 933.5 0.23% 2.150
US CRUDE CLc1 134.3 0.85% 1.130
DOW JONES .DJI 12601.19 -1.77% -227.49
------------------------------------------------------------
> US STOCKS-Stagflation fears send stocks sharply lower [.N]
> Dollar falls broadly as Fed lowers growth forecast [USD/]
> TREASURIES-Bonds fall as Fed seen holding rates steady [US/]
> Gold hits 1-month high on oil, platinum up 3 pct [GOL/]
> Oil surges over $134 on supply woes, weak dollar [O/R]
STOCKS TO WATCH

-- Fujitsu Ltd (6702.T: Quote, Profile, Research, Stock Buzz)

Fujitsu is seeking acquisitions abroad this year to expand in
software services, and is keen on France, an executive said on
Wednesday. [ID:nSP303097]

-- J-Power (9513.T: Quote, Profile, Research, Stock Buzz),

The Children's Investment Fund said it would wage a proxy
battle against J-Power as the British activist fund continues to
push for higher dividends and a limit on cross-shareholdings at
the electricity wholesaler. [ID:nT142916]

-- Aeon Co (8267.T: Quote, Profile, Research, Stock Buzz)

Talbots Inc (TLB.N: Quote, Profile, Research, Stock Buzz), a U.S. apparel retailer majority owned
by Aeon, posted higher-than-expected quarterly operating earnings
on Wednesday due to a "dramatic improvement" in its merchandising
gross margin, sending shares up as much as 15 percent.
[ID:nN21381199]

-- NTT DoCoMo Inc (9437.T: Quote, Profile, Research, Stock Buzz)

NTT DoCoMo, Japan's top mobile phone operator, plans to buy a
30 percent stake in Aktel, Bangladesh's No.3 cellphone carrier,
for about $386 million, sources familiar with the matter said.
[ID:nT63266]

-- Hoya Corp (7741.T: Quote, Profile, Research, Stock Buzz)

Hoya could spend up to $5 billion on acquisitions over the
next few years, its chief executive said on Wednesday, as it
looks to expand its medical equipment business. [ID:nT58858]

-- Daiichi Sankyo Co Ltd (4568.T: Quote, Profile, Research, Stock Buzz)

Daiichi Sankyo said on Wednesday it had agreed to buy
privately owned German biotech firm U3 Pharma AG for 150 million
euros ($237 million) to boost its pipeline of cancer drugs.
[ID:nL2155581]

-- Advantest Corp (6857.T: Quote, Profile, Research, Stock Buzz) and other chip equipment makers

Japanese orders for chip-making tools remained weak in April,
declining from the previous month and falling short of sales, as
low memory chip prices spoiled semiconductor makers' appetite for
new equipment, industry data showed on Wednesday.

The book-to-bill ratio stood at 0.76, the Semiconductor
Equipment Association of Japan said. The figure nudged up from
0.73 in March, but the book-to-bill ratio usually rises in April
due to seasonal falls in sales.

-- Shinsei Bank (8303.T: Quote, Profile, Research, Stock Buzz)

Shinsei Bank is seen as the leading candidate to buy the Lake
brand consumer lending operations being sold by GE Consumer
Finance Co, the Nikkei business daily reported on Thursday.
($1=.6330 Euro)
(Reporting by Elaine Lies; Editing by Michael Watson)