Japanese stocks seen edging up in thin trade

TOKYO, Sept 3 (Reuters) - Japanese stocks are seen likely to rise on Monday after comments by President George W. Bush and Federal Reserve Chairman Ben Bernanke reassured investors and led to gains on Wall Street, but lingering concerns about the U.S. economy may cap gains and keep trade light.

Steel stocks could climb after a report in the Nikkei business daily that Nippon Steel Corp (5401.T: Quote, Profile, Research, Stock Buzz) is likely to raise dividends for a fourth straight year, with exporters and trading firms also likely to do well.

But with U.S. markets closed for the Labor Day holiday on Monday and yen movements likely to be fairly settled, trade is expected to be range-bound, with little impact seen from the expected resignation of Japanese farm minister Takehiko Endo on Monday.

"Stocks are likely to rebound a bit and then consolidate, with investors moving to lock in profits," said Hiroichi Nishi, general manager of the equity division of Nikko Cordial Securities.

"The remarks by Bernanke appeared to hint that the Fed will cut interest rates, but many investors want to see economic indicators for August due out later this month for clues to how the U.S. economy is doing, leading to a wait-and-see mood."

Bush and Bernanke reassured investors they would do what was needed to shelter the economy from market turmoil, with Bernanke saying the Fed would not bail out investors who had made mistakes. But overall his comments reinforced the view that the Fed will cut interest rates at its meeting on Sept. 18.

An unidentified source in Japan's ruling Liberal Democratic Party was quoted by Kyodo news agency late on Sunday as saying farm minister Endo had decided to quit over illegal dealings at a farmers' group he headed, and would submit his resignation on Monday.

Little immediate impact is seen from Endo's expected resignation, but if it affected the popularity of Prime Minister Shinzo Abe's government and had a negative impact on economic policy over the longer term, it would become a negative factor for the stock market, Nishi said.

The benchmark Nikkei average .N225 is seen moving in a 16,400-16,700 range on Monday. It rose 2.6 percent on Friday, advancing 415.27 points to 16,569.09. On the week, it gained about 2 percent.