Nikkei likely to weaken after steep rally; eyes on BOJ

TOKYO, Oct 29 (Reuters) - Japan's Nikkei share average seen weakening slightly on Monday after gaining 6 percent since Oct. 12 on growing expectations that the Bank of Japan will take substantial easing steps when it meets on Tuesday. A firmer yen will also likely weigh on the market. Market players said the Nikkei was likely to trade between 8,850 to 9,000 after Nikkei futures in Chicago closed at 8,965, up 0.4 percent from the close in Osaka. ``It will be difficult to move today -- there are high expectations for easing but the market is still uncertain,'' said Kenichi Hirano, operating officer at Tachibana Securities. Sources have said the BOJ is expected to ease monetary policy by expanding asset purchases by at least 10 trillion yen and may commit to injecting cash until 1 percent inflation is achieved. ``Since they spent 10 trillion yen last month, this time they really have to do something bigger if they don't want to disappoint the market,'' Hirano said. Honda Motor Co Ltd, Nomura Holdings Inc, Renesas Electronics Corp are among companies reporting after the bell on Monday. Sixty-seven percent of the 21 Nikkei companies that have reported results so far have undershot analysts' predictions in Thomson Reuters' StarMine. But many market participants say that exaggerated pessimism ahead of the earnings season has meant robust share price gains for quite a few stocks that did not have results that were worse than analysts' predictions. The yen was also firmer on Monday, rising to 79.67 to the dollar after hitting a four-month low on Friday. The Nikkei fell 1.4 percent to 8,933.06 on Friday on concern that Chinese funds face heavy redemptions after poor quarterly performances, which triggered a sell-off across Asian equity markets.

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-NEC CORP Reporting after the bell on Friday, internet provider NEC Corp said it had made an operating profit of 47.4 billion yen for the first half, despite making a small operating loss in the first quarter.