Tokyo shares outlook: Lower ahead of FOMC

TOKYO (AFX-ASIA) - Share prices are expected to open lower due to investor caution ahead of tomorrow's meeting of the U.S. Federal Open Market Committee, dealers said.

	    While the consensus view is that a further 50 basis point cut will be decided at the U.S. policy-making meeting, economic data released Friday, sparked fears that interest rates in the U.S. would not fall much lower, they 

said.

	    On Friday, the Nikkei 225 index closed up 26.13 points at 14,043.92.

	    In Chicago Friday, the Nikkei June futures contract finished at 14,130, compared with a closing level of 14,110 in Osaka.

	    There is also some nervousness ahead of the announcement Friday of the rebalancing of free float stocks by Morgan Stanley Capital International, dealers said.

	    Receding buying support from foreign investors will also weigh on the market, after they bought some 1 trln yen worth of Japanese equities in April, they said.

	    As a result, the local market will remain exposed to the unwinding of cross shareholdings by Japanese institutional investors, dealers said.

	    However, the market will see some downside support below the 14,000-point level on the Nikkei 225 index, thanks to high levels of capital inflow from 

retail investors, they said.

	    Meantime, investors will keep a close eye on earnings results this week from companies such as Toyota Motor, Nissan Motor and Mitsubishi Motors.

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