Nikkei set to rebound on Wall St gains; caution prevails on Fed outlook
TOKYO, Aug 21 (Reuters) - Japan's Nikkei share average is expected to rebound on Wednesday, helped by Wall Street snapping a four-session losing streak, but investors remain on edge amid a sharp slide in emerging markets on persistent concerns that the U.S. Federal Reserve will start tapering its stimulus soon. Market players said the Nikkei was likely to trade between 13,300 to 13,500 during the session after tumbling 2.6 percent to 13,396.38 on Tuesday, the biggest drop in two weeks. It hit a seven-week low last Wednesday. Nikkei futures in Chicago closed at 13,405 up 0.04 percent from the close in Osaka of 13,410. On Tuesday, concerns about sliding emerging markets triggered a rout in Japanese shares with traders citing an unwinding of hedge funds' cash positions in those markets as well as in other risky assets such as Nikkei futures. "Investors are still staying alert on Asian markets moves and emerging markets' currencies," said Yoshiyuki Kondo, an analyst at Daiwa Securities. "We may see a technical rebound in early trade, but we need to be careful on a possible move by program traders because such change in market direction can happen so fast." The Federal Open Market Committee will release the record of its July 30-31 meeting on Wednesday. Investors expect the minutes to contain clues on whether the Fed is on track to reduce its $85 billion monthly purchases of U.S. bonds at its September 17-18 meeting. Global markets have been roiled by the uncertainty over the Fed's stimulus, which has underpinned riskier assets in recent years.
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