TOKYO, June 21 (Reuters) - Japan's Nikkei share average is set to rise slightly after the U.S. Federal Reserve ramped up its monetary stimulus, but disappointed some traders hoping for more quantitative easing to offset the euro zone crisis and bolster a flagging U.S. economy.
Japanese exporters are likely to benefit from an easing yen after the dollar firmed on the Fed's decision to hold fire on a third round of quantitative easing, although it extended "Operation Twist" to the end of the year and pledged an extra $267 billion to the programme. "The positive impact of a weaker yen should outweigh the disappointment about the U.S.'s economic outlook and the lack of more powerful stimulus," said Masayuki Doshida, senior market analyst at Rakuten Securities. "But there won't be a sustained rally on the back of this." The Fed also cut its GDP projection for this year to between 1.9 and 2.4 percent, down from its April estimate of 2.4 to 2.9 percent, and revised down its outlook for 2013 and 2014. Market players said the Nikkei was likely to trade between 8,700 to 8,850 on Thursday after Nikkei futures in Chicago closed at 8,785, up 0.5 percent from the close in Osaka of 8,740.
"Trading is going to remain thin today as there's no real good news yet. Investors are still waiting on a significant policy response to global economic problems," said Doshida.
Euro zone finance ministers meet later on Thursday to discuss recent efforts to stabilise the currency union after Spanish bonds yields rocketed to euro-era highs this week and a victory for a pro-bailout party in a Greek election failed to calm fears about the country's fiscal situation.
The Nikkei closed 1.1 percent up at 8,752.31 on Wednesday, but is still down 13.2 percent on the quarter, hurt by concerns about slowing growth in the U.S. and China as well as a deepening euro zone crisis. However, it has recovered 5.5 percent from a six-month low hit on June 4. > Wall St edges down in volatile post-Fed trade > Dollar slips versus euro in choppy trade after Fed > Most bonds slip, 30-yr up as Fed extends buying > Gold falls as Fed stimulus extension disappoints > Oil hits 18-month low as stockpiles rise STOCKS TO WATCH -NISSAN MOTOR CO Nissan is to slash its domestic production capacity by 15 percent in July to 1.15 million units, but will not cut any staff, according to the Nikkei business daily. -RENESAS ELECTRONICS CORP The top three shareholders of troubled chipmaker Renesas Electronics agreed to give it 50 billion yen towards restructuring, half the requested amount, according to sources. NEC Corp, Hitachi Ltd and Mitsubishi Electric Corp are to provide a support package that includes loans,