TOKYO, Nov 29 Japan's Nikkei average is expected to rebound on Thursday from a one-week closing low as investors took comfort from comments from the top Republican in U.S. Congress that he was optimistic on averting the so-called 'fiscal cliff'. John Boehner's remarks helped ease investor concerns the 'fiscal cliff' -- about $600 billion of spending cuts and tax increases taking effect in the new year -- could tip the world's largest economy into recession, and lifted U.S. stocks overnight. "Yesterday's fall was due in part to fears of the U.S. fiscal situation, and there appears to be some progress and U.S. shares recovered, so the drop likely won't be repeated today," said Hiroichi Nishi, equity general manager at SMBC Nikko Securities. "The stronger yen will weigh on the market, but there could also be month-end buying." The Nikkei was likely to trade between 9,300 and 9,400, strategists said, while Nikkei futures in Chicago closed at 9,345 on Wednesday, up 0.5 percent from the Osaka close of 9,300. On Wednesday, the Nikkei shed 1.2 percent to 9,308.35, hitting a one-week closing low and snapping a four-session winning streak. The broader Topix dropped 1.3 percent to 771.39. The benchmark Nikkei has rallied 7.4 percent over the past two weeks, taking the month-to-date gain to 4.3 percent, on track for its best monthly performance since June. The Nikkei is up 10.1 percent so far this year, trailing a 12.1 percent rise in the U.S. S&P 500 and an 11.7 percent gain in the pan-European STOXX Europe 600. Still, Japanese equities are more expensive than their European counterparts, with a 12-month forward price-to-earnings of 12 versus STOXX Europe 600's 11, data from Thomson Reuters Datastream showed. The S&P 500 has a 12-month forward P/E of 12.5. > Wall St jumps in another 'fiscal cliff' swing > Euro edges lower as Greece, U.S. fiscal woes weigh > Treasuries gain on standoff in U.S. budget talks > Gold drops 1.5 pct on deflation fears, fund sales > Oil falls as demand worries trump fiscal cliff hope STOCKS TO WATCH --JFE HOLDINGS INC Steelmaker JFE is expected to generate positive free cash flow of about 100 billion yen ($1.2 billion) this fiscal year, due to lower costs, smaller inventories and lower capital expenditures, the Nikkei newspaper said. --FUJI HEAVY INDUSTRIES LTD Fuji Heavy Industries will cut exports of Subaru vehicles to China by about 80 percent to avoid further increase in excess inventory, the Nikkei said.
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