Nikkei set to rise on end-of-month short-covering

TOKYO, June 29 (Reuters) - Japan's Nikkei share average is
likely to rise on Friday as a spurt of month-end short covering
winds back quarterly losses, although early trading may be
depressed after EU leaders ended the first day of a summit at
loggerheads.

The Nikkei has fallen 12 percent so far in the second
quarter, which ends today, wiping out much of the
first-quarter's 19.3 percent surge, the biggest first-quarter
gain in 24 years.

Market players said the Nikkei was likely to trade
between 8,750 to 8,950, potentially dipping initially before
gains accelerate into the afternoon session as investors unravel
their short bets.

"Hopes for any significant progress at the EU summit have
already evaporated, but if they don't even agree on the details
of the Spanish bank bailout and hint that the ECB will drop
rates, there will be disappointment," said Masayuki Doshida,
senior market analyst at Rakuten Securities.

Euro zone leaders are to conclude the two-day meeting later
on Friday to discuss how to tackle an expanding debt zone
crisis. On Thursday, Italian and Spanish leaders refused to sign
a growth package until Germany agreed to a short-term plan to
reduce the cost of their credit.

Nikkei futures in Chicago <0#NIY:> closed at 8,835, down 0.4
percent from the close in Osaka of 8,870.

Despite the uncertainty surrounding Europe, the Nikkei ended
1.7 percent up on Thursday to its highest close in six weeks,
buoyed by investors indulging in "window dressing" as the month
and second-quarter drew to a close.

However, market watchers said trading has been thin
recently, making the index's gains less significant, and that it
could make a reversal in early July as concerns about slowing
global growth and an intractable euro zone crisis creep back in.

> Wall St pares losses late, ends modestly lower
> Euro falls to more than 3-wk low as EU leaders meet
> U.S. bonds rise with safety bid during EU summit
> Gold down over 1 pct on US healthcare ruling, Europe
> Oil heads for worst quarter since 2008 crisis

STOCKS TO WATCH

-NOMURA HOLDINGS INC

Nomura Holdings is to cut top executives pay and may halt
some operations as it attempts to solve an insider trading
scandal, according to sources.

A management committee is to meet on Friday to approve the
pay cuts and other measures after an internal
investigation.

-SUZUKI MOTOR CORP

Suzuki Motor Corp announced at a shareholders meeting on
Wednesday that it is planning to increase its capital
expenditure by over 60 percent, spending an average of 200
billion yen ($2.5 billion) through 2016, according to the Nikkei
business daily.

-ASAHI GROUP HOLDINGS

Asahi Group Holdings is expected to post an operating profit
of about 35 billion yen ($441 million) for the six months ending
in June, a drop of 5 percent year-on-year, due to high promotion
costs for nonalcoholic beverages, according to the Nikkei daily.
($1 = 79.3100 Japanese yen)

(Reporting by Sophie Knight; Editing by Richard Pullin)