Nikkei seen holding in range ahead of U.S. election

Mon Nov 5, 2012 11:23pm GMT

TOKYO, Nov 6 (Reuters) - Japan's Nikkei share average is
likely to be contained in a narrow range on Tuesday as investors
avoid taking big positions ahead of the U.S. election outcome,
with a weak yen offering support to exporters. 
    
    The Nikkei was expected to trade between 8,950 and
9,050, strategists said, while Nikkei futures in Chicago closed at 9,015 on Monday, down about 0.1 percent from
the Osaka close.
    "The main focus is the U.S. election, and uncertainty ahead
of that is going to keep markets, including Japanese stocks, in
a range," said Kenichi Hirano, operating officer at Tachibana
Securities.
    "Everyone is talking about the likely impact of the outcome,
but except for a short-term immediate reaction, no matter who
wins, it's going to take him a long time to put his policies in
place. The trends will not change suddenly," Hirano said.
    "For now, we are also watching forex, and the yen levels, as
well as the strength of the U.S. economy."
    The yen was quoted at 80.26 to the dollar on Tuesday, not
too far from a six-month low of 80.68 hit on Friday.
    On Monday, the Nikkei slipped 0.5 percent to 9,007.44 but
held above its five-day moving average at 8,955.16, while the
broader Topix index lost 0.6 percent to 747.95.
    Investor demand for Nikkei call options outpaced demand for
put options on Monday. Societe Generale said the most popular
call on the Nikkei with a November maturity had a strike price
at 9,250, 2.7 percent higher than Monday's close.
    The next most-traded was a put option at 8,750
, followed by another put at 9,000 
and a call at 9,500. 
    The benchmark Nikkei is up 6.5 percent this year, trailing a
12.7 percent rise in the U.S. S&P 500 and a 11.7 percent
gain in the pan-European STOXX Europe 600 index.
        
> Wall St rises in thin trade day before U.S. election      
> Greek austerity push squeezes euro; U.S. election eyed  
> Treasuries up before U.S. vote; Greece worries mount     
> Gold rises on short-covering, U.S. election eyed        
> Brent crude ends higher                                  
    
    STOCKS TO WATCH
    --TOYOTA MOTOR CORP 
    Toyota raised its full-year net profit forecast to $9.7
billion even as it put the cost of recent anti-Japanese protests
and a slowing economy in China, the world's biggest autos
market, at lost sales of 200,000 cars. 
    --FAST RETAILING CO LTD 
    The operator of casual fashion chain Uniqlo lifted its
annual dividend forecast to 280 yen per share from a previous
forecast of 260 yen.