Nikkei set to fall on Wall St slide, economy fears

TOKYO, Oct 3 (Reuters) - Japan's Nikkei average is likely to
fall on Friday, after logging a three-year closing low the
previous day as U.S. stocks slid on worries that the economy will
worsen even if Congress passes a $700 billion rescue bill.

"The market can't avoid opening lower because of the
deteriorating economy and uncertainty about the bailout bill,"
said Yutaka Miura, senior technical analyst at Shinko Securities.

"But we may see some short-covering as U.S. stocks could gain
after all negative news such as the House vote on the bill and
jobs data are out later today."

The U.S. Senate passed the government's financial rescue plan
after the House rejected it in its original form. The House of
Representatives is expected to vote on the revised bill on
Friday.

Miura said investors also find it hard to take positions,
either sell or buy, ahead of the weekend.

Nikkei futures traded in Chicago 2NKc1 finished at 11,060
on Thursday, 90 points below their close in Osaka JNIc1,
pointing to a lower opening.

Market participants expect the benchmark Nikkei .N225 to
trade between 11,000 and 11,200. It slipped 1.9 percent the
previous day to end at 11,154.76, the lowest close since May
2005.
----------------------MARKET SNAPSHOT @ 2258 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1114.28 -4.03% -46.780
USD/JPY JPY= 105.16 -0.15% -0.160
10-YR US TSY YLD US10YT=RR 3.6257 -- -0.116
SPOT GOLD XAU= 832.45 -0.31% -2.550
US CRUDE CLc1 93.95 -0.02% -0.020
DOW JONES .DJI 10482.85 -3.22% -348.22
-------------------------------------------------------------
> Economic, credit fears punish Wall St [.N]
> Dollar soars vs euro as Trichet signals rate cut [USD/]
> Treasuries climb in safety bid as stock plunge [US/]
> Precious metals tumble on dollar rally, cash run [GOL/]
> Oil falls over 4 pct on economic, demand concerns [O/R]
STOCKS TO WATCH

-- Mitsubishi UFJ Financial Group (8306.T)

Mitsubishi UFJ Financial Group, Japan's largest bank, and
U.S. investment bank Morgan Stanley (MS.N) have agreed to merge
their securities units in Japan, public broadcaster NHK said on
Friday. [ID:nT209903]

Separately, Aberdeen Asset Management Plc (ADN.L) said on
Thursday that MUFG unit Mitsubishi UFJ Trust and Banking Corp is
to take a 9.9 percent stake in the UK funds group, which may
eventually double, under a cooperation deal. [ID:nL2437562]

-- Toshiba Corp (6502.T)

The president of Japanese electronics conglomerate Toshiba
said on Thursday that he saw no need to buy SanDisk Corp
(SNDK.O), a flash memory card maker sought by South Korea's
Samsung Electronics (005930.KS). [ID:nT337610]

-- Taisho Pharmaceutical Co Ltd (4535.T)

The drumaker said it had decided to stop development of
diabetes drug TS-033 in Japan and the United States. The drug was
at Phase 2 trial.

-- Fast Retailing Co Ltd (9983.T)

Fast Retailing said on Thursday that its Uniqlo casual
apparel chain's same-store sales jumped 20.8 percent in
September, thanks to strong sales of autumn items.

-- Toyota Motor Corp (7203.T)

Toyota's European sales forecast for next year is no longer
realistic, the automaker's regional head said on Thursday, adding
that the figure is more likely to match last year's level given
the slowdown in the overall market and global economy.
[ID:nT278808]

-- Nissan Motor Co (7201.T)

A top executive at Nissan Motor said on Thursday Japan's No.3
automaker was still on track to meet its sales target of 3.9
million vehicles this business year despite a sharp downturn in
many key markets. [ID:nT122624]

-- Lawson Inc (2651.T)

Convenience store operator Lawson Inc plans to increase the
number of Lawson Store 100 stores, which sell items for 100 yen,
by 30 percent to 1,200 by the end of fiscal 2010, the Nikkei
business daily news reported on Friday.

The Nikkei said Lawson would merge subsidiaries Value Lawson
Inc, which operates the stores, and Ninety-Nine Plus Inc, which
runs a chain called Shop 99, in March 2009, and all the locations
would change to the Lawson Store 100 format next September.

-- Mitsubishi Heavy Industries Ltd (7011.T)

Mitsubishi Heavy has won an order to build a driverless
people mover system at Miami International Airport with two U.S.
companies for about 27.4 billion yen, the Nikkei business daily
reported on Friday. [ID:nN02295797]
(Reporting by Aiko Hayashi)