TOKYO (Thomson Financial) - Japanese shares are expected to open mixed on Monday after a directionless performance in New York on Friday as weak third quarter results from Dell Inc weighed heavily on the Nasdaq.
Shares of Dell, whose third quarter earnings just missed expectations, fell 3.60 US dollars or 12.8 percent to 24.54 dollars.
'But mounting expectations for a further rate cut in the US are likely to support the Japanese market following recent comments from Fed officials,' Mizuho Research Institute analyst Koji Takeuchi said.
'Views that forthcoming US non-farm payroll data (due for release on December 7) will be weak are likely to enhance expectations about an imminent rate reduction,' he said.
The Federal Open Market Committee will hold its next meeting on December 11.
Fed chairman Ben Bernanke said last week that persistently tight credit conditions, the housing slump and high energy prices will probably create some 'headwinds for the consumer in the months ahead,' and the central bank will have to be 'exceptionally alert and flexible'.
The comments echoed those of Fed Vice Chairman Donald Kohn earlier in the week, which helped Wall Street recover some of its recent losses. Investors read Bernanke's words as a sign that the Fed is willing to lower interest rates again after cutting them at the past two meetings.
Meanwhile, investors may react positively to a report in the Wall Street Journal that the Bush administration and major financial institutions are close to agreeing on a plan that would temporarily freeze interest rates on certain subprime loans.
The plan is being negotiated between regulators, including the Treasury Department, and a coalition of mortgage-related companies including Citigroup Inc, Wells Fargo & Co, Washington Mutual Inc and Countrywide Financial Corp, the report said.
The Dow Jones Industrial Average closed up 59.99 points or 0.45 percent to 13,371.72 on Friday, while the Nasdaq fell 7.17 points or 0.27 percent to 2,660.96.
The Chicago-traded Nikkei futures contract settled at 15,790 points, little changed from 15,800 at the Osaka Securities Exchange on Friday.
On the Tokyo bourse, the blue-chip Nikkei 225 Stock Average finished up 166.93 points or 1.1 percent at 15,680.67, while the broader TOPIX index was up 17.41 points or 1.2 percent at 1,531.88.
Ahead today, the Ministry of Finance will release its quarterly survey on corporate profit and capital investment for the July-September quarter 10 minutes before the opening bell.
The Japan Automobile Dealers Association is due to report new car sales for November in the afternoon.
Stocks to watch include Mitsubishi Heavy Industries after a Nikkei report said the Japanese engineering and shipbuilding company is in talks with multiple transport authorities in major US cities about orders for its linear motor car.
The newspaper reported separately that the South African government has called on the company to provide capital for its development of a new generation of small nuclear reactors.
Sojitz Corp may be actively traded on a report that the Japanese trading house may enter the food wholesale business in Vietnam by taking a 25 percent stake in the country's top player.
(1 US dollar = 111.16 yen)
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