Japanese stocks may fall as banks pressure market

TOKYO, July 15 (Reuters) - Big Japanese lenders such as
Mitsubishi UFJ Financial Group are likely to put Tokyo
shares under pressure on Tuesday, as worries about the health of
U.S. banking sector continue to weigh.

"Banks are likely to lead the market lower," said Yoku Ihara,
manager of the investment information department at Retela Crea
Securities.

"In March, it was Bear Stearns only, but this time, the
entire U.S. financial sector has been hurt," he said, referring
to the near-collapse of the U.S. securities firm that fanned
fears of a financial crisis.

The benchmark Nikkei average .N225 will likely trade
between 12,800 and 13,100, market participants said. The Nikkei
fell 0.2 percent on Monday to close at 13,010.16.


Nikkei futures 2NKc1 closed at 12,970 in Chicago trading,
80 points below the Osaka close JNIc1.

The Bank of Japan is expected to keep interest rates on hold
on Tuesday and warn that Japan's growth will likely be slower
than it had anticipated a few months ago due to skyrocketing oil
and raw materials prices.[ID:nT70058]
----------------------MARKET SNAPSHOT @ 2301 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1228.3 -0.9% -11.190
USD/JPY 106.2 -0% 0.000
10-YR US TSY YLD 3.8629 -- 0.000
SPOT GOLD 970.3 -0.14% -1.400
US CRUDE CLc1 145.01 -0.12% -0.170
DOW JONES .DJI 11055.19 -0.41% -45.35
-------------------------------------------------------------
> Wall St sags as bank fear offsets Fannie, Freddie aid [.N]
> Dollar up vs euro on Fannie, Freddie rescue plan [USD/]
> Bonds gain on safety bid amid bank worries [US/]
> Financial market jitters boost safe-haven gold [GOL/]
> Oil firms over $145 on Brazil, demand worries weigh [O/R]
STOCKS TO WATCH
-- Tokyo Electron Ltd , other chip equipment makers

U.S.-based chip equipment maker Novellus Systems Inc (NVLS.O: Quote, Profile, Research, Stock Buzz)
posted a quarterly net loss on Monday due to charges and a
persistent slump in the semiconductor equipment manufacturing
industry.

-- Sony Corp

Microsoft Corp said on Monday its Xbox 360 console
will sell better than Sony's rival PlayStation 3 over the
lifetime of the machines.

-- Square Enix Co

Microsoft also said on Monday that Square Enix would launch
the "Final Fantasy XIII" for its Xbox 360 video game console,
sharing the upcoming version of the blockbuster role-playing game
with Sony's PlayStation3.

Square Enix had so far only said it was developing the next
installment of the "Final Fantasy" series for the Sony console.

-- Hokkaido Electric Power Co

The regional utility said on Monday it expected to post
losses for the year ending in March 2009, hit by surging fuel
prices and an outage work at a nuclear power plant.

The company said it expected to post an operating loss of 38
billion yen, down from a 21 billion yen operating profit in its
previous forecast, but it kept its annual dividend forecast of 60
yen per share.

-- Matsui Securities Co
The online broker will be added to the Nikkei 225 stock
average on July 28, replacing credit card firm Mitsubishi UFJ
Nicos after it is delisted, the publisher of the
benchmark share average said on Monday.

Epson Toyocom Corp , a maker of crystal devices, will
take the place of Mitsubishi UFJ Nicos in the Nikkei 500 Stock
Average, the Nikkei said on its website.

-- Electric Power Development Co (J-Power)

British activist fund TCI said on Monday it will heed the
Japanese government's order not to buy more shares in electricity
wholesaler J-Power.

-- Mitsubishi UFJ Financial Group and other megabanks

Japan's three megabanks held about 4.7 trillion yen in debt
securities issued by Fannie Mae and Freddie Mac as of March 31,
while major insurers' exposure came to more than 4 trillion yen,
the Nikkei business daily reported on Tuesday.

MUFG had the biggest exposure among the three megabanks,
holding 3.3 trillion yen in bonds, compared with Mizuho Financial
Group Inc's 1.2 trillion yen and Sumitomo Mitsui
Financial Group Inc's 200 billion yen, the paper said.
(Reporting by Taiga Uranaka; Editing by Hugh Lawson)