TOKYO, March 2 (Reuters) - Japan's Nikkei stock index may
slip on Monday on worries about banks after the U.S. government
took a large stake in Citigroup (C.N: Quote, Profile, Research), but hopes for Japanese
government stock-buying steps will limit the market's losses.

Investors may home in on Sony Corp (6758.T: Quote, Profile, Research) after the company
said on Friday that President Ryoji Chubachi would step down and
CEO Howard Stringer would take direct oversight of the company's
ailing electronics division -- a move that comes about a month
after the company warned it would post a record annual operating
loss. [ID:nT212310]

U.S. stocks fell on Friday after the government said it would
take a large stake in Citigroup's common shares, fanning fears it
will increase its role in other major banks, while healthcare and
drug companies also fell. [.N]
"The macroeconomic environment remains pretty grim, but
expectations for public pension fund buying on dips and hopes for
government stock-buying steps are likely to limit falls," said
Hiroichi Nishi, general manager at the equity division of Nikko
Cordial Securities.

"Fears about the U.S. and European financial systems will
weigh on the market, but buying at the lows means we won't see
stocks fall sharply."

Japan's government last week said it was looking into ways to
support the stock market, which may include setting up a
stock-buying agency the way it did in the mid-1960s.

Banks may be weak in the wake of falls in their U.S. peers on
Friday, when the S&P financial index sank 8.1 percent.

Healthcare stocks may sink on worry that U.S. President
Barack Obama's budget proposal will affect their profits.

The benchmark Nikkei .N225 is likely to move between 7,300
and 7,500. It finished Friday at 7,568.42 after a week in which
it came within sight of a 26-year low just below 7,000.

In a sign the market will fall, Nikkei futures traded in
Chicago 2NKc1 closed at 7,380 compared with the Osaka close of
7,560 JNIc1.
----------------------MARKET SNAPSHOT @ 2244 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 735.09 -2.36% -17.740
USD/JPY JPY= 97.65 -0.05% -0.050
10-YR US TSY YLD US10YT=RR 3.0205 -- 0.000
SPOT GOLD XAU= 939.9 0.00% 0.000
US CRUDE CLc1 44.39 -1.84% -1.100
DOW JONES .DJI 7062.93 -1.66% -119.15
-------------------------------------------------------------
> Bank fear sends S&P to worst-ever start to a year [.N]
> Dollar gains on safe-haven bid after weak U.S. data [USD/]
> Longer bonds fall on swelling supply outlook [US/]
> Gold drops for 5th straight day on weak stocks [GOL/]
> Oil pulled lower by dismal U.S. GDP data [O/R]
STOCKS TO WATCH

-- Honda Motor Co (7267.T: Quote, Profile, Research)

Honda is likely to cut output at home by more than 150,000
units in the year from April, bringing Japanese production below
1 million vehicles for the first time in 14 years, the Nikkei
business daily reported. [ID:nT143166]

-- Sony Corp (6758.T: Quote, Profile, Research)

Sony said on Friday that company President Ryoji Chubachi
would step down and CEO Howard Stringer would double as president
and directly oversee the company's ailing electronics division --
a move that comes about a month after the company warned it would
post a record annual operating loss. [ID:nT212310]

-- Resona Holdings (8308.T: Quote, Profile, Research)

Resona, Japan's fourth-largest bank, said on Friday it will
repay 45 billion yen ($462 million) of public funds.

Nearly half of Resona's shares are still held by a
government-backed institution following a bailout of the bank. As
of June the bank still owed the government 2.8 trillion yen.
[ID:nT212432]

-- Olympus Corp (7733.T: Quote, Profile, Research)

Beckman Coulter Inc (BEC.N: Quote, Profile, Research), a maker of medical test systems,
said on Friday it had agreed to acquire the diagnostic systems
part of Olympus Corp's life sciences business for about $800
million. [ID:nBNG458723]

-- Nissan Motor Co (7201.T: Quote, Profile, Research)

Nissan, Japan's third-biggest automaker, said on Friday it
would skip some major international auto shows in the new
business year starting on April 1 to save cash amid sliding
global car sales. [ID:nT223900]

-- Nippon Oil Corp(5001.T: Quote, Profile, Research), Nippon Mining Holdings Inc
(5016.T: Quote, Profile, Research)

Nippon Oil, Japan's biggest refiner, and smaller peer Nippon
Mining Holdings said on Friday they would delay their planned
merger by six months to April 2010 to give them time to clear
U.S. regulatory hurdles. [ID:nT130760]
(Reporting by Elaine Lies; Editing by Hugh Lawson)