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Nikkei set to fall for the 3rd straight day on earnings fears

TOKYO, Oct 11 (Reuters) - Japan's Nikkei average is set to fall for a third straight session on Thursday on mounting concerns that the upcoming quarterly corporate earnings will be weak after a tame start to the U.S. results season.

SmartEstimates from Thomson Reuters StarMine expects an average negative earnings surprise from Nikkei companies of 1.3 percent for July-September quarterly results, worsening slightly from an earlier estimate of a 1.2 percent negative surprise.

The Nikkei

was likely to trade between 8,500 and 8,600, strategists said, while Nikkei futures in Chicago

closed at 8,550 on Wednesday, down 0.5 percent from the Osaka

close of 8,590.

"Disappointingly, U.S. cyclicals, such as Caterpillar

, Chevron and Alcoa

fell sharply yesterday. So even through there was a ray of hope after some Japanese semi-conductor shares and other manufacturers recovered from lows yesterday, it will be a difficult day," said Eiji Kinouchi, chief technical analyst at Daiwa Securities.

The S&P 500 fell for a fourth day on Wednesday after Chevron said third-quarter profits would be "substantially lower" than the previous quarter and Alcoa posted a quarterly loss and cut its outlook for global aluminum demand.

On Wednesday, the Nikkei shed 2 percent to 8,596.23, hitting

a two-month closing low, while the broader Topix

index

dropped 1.5 percent to 716.84.

The Bank of Japan bought 31.4 billion yen ($401 million) worth of exchange-traded funds on Wednesday to support the market.

The benchmark Nikkei is up 1.7 percent so far this year, trailing a 13.9 percent rise in the S&P 500

and a 9.9 percent gain in the pan-European STOXX Europe 600

index.

> Blue chips Chevron, Alcoa lead Wall Street's sell-off

> Euro falls vs dollar; Spain, Greece in focus

> Treasuries gain in thin volume on global growth fears

> Gold ends flat as stimulus fades, euro zone eyed

> Oil falls as economic worries, stock market pressure

STOCKS TO WATCH --MITSUBISHI MOTORS CORP

Mitsubishi Motors said on Wednesday that one or more shareholders had converted 5,300 preferred shares into 74.6 million new common shares at 71 yen per share, worth 5.3 billion yen ($67.8 million), since the start of October.

--POWER COMPANIES

Japan's new tax on carbon emissions will cost utilities about 80 billion yen ($1 billion) annually from 2016, adding to their already high costs of running power stations after the Fukushima crisis shut most of the country's nuclear plants, a government backed think-tank said.

($1 = 78.3200 Japanese yen)

(Reporting by Dominic Lau and Hideyuki Sano; Editing by Richard Pullin)

((dominic.lau@thomsonreuters.com)(+81 3 6441 1917)(Reuters Messaging:)(dominic.lau.thomsonreuters.com@reuters.net))

Keywords: MARKETS JAPAN STOCKS/