Japan hopes EU will heed its fears over BHP/Rio

By Yuko Inoue

TOKYO (Reuters) - Japan's antitrust watchdog is expected to raise objections soon to BHP Billiton's (BHP.AX) $78 billion offer for Rio Tinto (RIO.AX), hoping to sway European regulators vetting the global mining sector's biggest takeover.

Japan does not want to see its $200 billion steel industry at the mercy of a single resources giant that would control well over half the country's iron ore imports and could use its muscle to increase prices for the raw material.

While Japan's Fair Trade Commission (FTC) lacks the legal clout to stop a takeover, it hopes its objections, which could be aired as early as next week, will influence the debate in Europe.

BHP (BLT.L) has already won approval from the United States and Australia for its all-share offer, rejected by Rio (RIO.L), as too low, but it needs the blessing of Europe, which is concerned the deal may lead to higher prices.

"The fact the EU has raised concerns means Japan has already been successful in influencing the debate," said Akinori Uesugi, a consultant to law firm Freshfields Bruckhaus Deringer.

"BHP initially didn't care about Japan, but has recently changed its stance and, I think, will come to the table with Japan to negotiate remedies next month ..." said Uesugi, a former senior FTC official.

BHP has cooperated with the Japanese regulator, a spokeswoman for the miner said.

"The FTC requested information. We supplied that and we are in full compliance with our legal obligations," she said, declining comment on what Japan could do to stymie a deal.