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Japan Hot Stocks-Venture Link, Tsumura, Suruga

TOKYO, July 25 (Reuters) - The following stocks are on the move on Thursday. **VENTURE LINK DOWN AFTER DIR DOWNGRADES**

Venture Link Co Ltd down 129 yen or 8.75 percent at 1,345.

Shares of the management consulting firm specialising in franchise-chain operations extended falls into a seventh day despite a July 17 announcement of strong earnings for the year ended in May.

Kiyohisa Hirano, a Daiwa Institute of Research analyst, said on Thursday he had downgraded the shares to "4", meaning the stock was expected to underperform five to 15 percentage points below the TOPIX index in the next six months, from "3".

Hirano said a factor the company counted as profit for the latest annual results is controversial, possibly causing investor doubts over its accounting.

Investors are currently reluctant to invest in companies with complex or irregular accounting given rampant mistrust over corporate accounting in the United States. 0554 GMT **TSUMURA EXTENDS GAIN AFTER NOMURA RATING**

Tsumura & Co up 84 yen or 10.4 percent at 892, adding to the previous day's 11.76 percent rally.

Buying continued after Nomura Securities initiated coverage of the maker of Chinese medicines on Wednesday with a "1" rating, meaning the stock is expected to outperform the TOPIX index by more than 15 percentage points in the next six months.

The stock has risen almost 100 percent this year, compared with a five percent fall in the TOPIX. 0435 GMT **SURUGA BANK DOWN ON POSSIBLE MOODY'S DOWNGRADE**

Suruga Bank Ltd down 27 yen or 4.14 percent at 625, compared with a 1.94 percent fall in the sector subindex .

Moody's Investors Service said on Thursday it placed the regional bank's A3 long-term deposit rating and D+ bank financial strength rating under review for possible downgrade.

Moody's also placed two other Japanese regional banks -- Ogaki Kyoritsu Bank Ltd and Juroku Bank Ltd -- under negative review. Ogaki was down 3.51 percent at 550 yen and Juroku was flat at 400 yen.

Investors are dividing possible winners from losers among smaller and regional banks as the Financial Services Agency, Japan's top banking regulator, prepares a framework to promote their mergers, traders said.

Bank of Fukuoka Ltd down 3.14 percent at 525 yen. On Wednesday, Fukuoka hit a 10-month intraday high of 544, a 22 percent gain since the beginning of this year. 0401 GMT

**ARABIAN OIL SOARS ON KUWAITI GAS PROJECT REPORT**

Arabian Oil Co Ltd, Japan's biggest oil producer, up 6.51 percent at 540 yen.

Arabian oil attracted buyers after the Yomiuri Shimbun daily said on Thursday it had finalised a deal to participate in a natural gas development project in Kuwait, traders said.

After completing talks with the Kuwaiti government, Arabian Oil will offer technical assistance, and commence drilling operations as early as 2003, the paper said. 0133 GMT **E*TRADE UP ON STRONG PROFITS**

E*Trade Japan KK up 6.37 percent at 63,500 yen, outperforming a 1.95 percent rise in the benchmark Nikkei average .

Japan's largest online broker in terms of the number of client accounts attracted buyers after it said on Wednesday its group recurring profit in the April-June quarter more than doubled from 128 million yen a year ago.

E*Trade is owned by Internet investor Softbank Corp and U.S.-based E*Trade Group Inc .

Softbank up 3.51 percent at 1,475 yen. 0115 GMT **TOYOTA HITS 10-MONTH LOW**

Toyota Motor Corp down 1.04 percent at 2,850 yen, after hitting a 10-month intraday low of 2,845 yen.

"Toyota is being hit hard by institutional selling and the unwinding of cross-held shares," said Stephen Usher, senior analyst at JP Morgan, which has a "market perform" rating on the stock.

"But also weighing is the fact that Toyota is now the third-most profitable automaker in Japan and is losing market share domestically. Product momentum seems to be with Nissan Motor Co Ltd in the domestic market and Honda Motor Co in the U.S.," he added.

Toyota shares have fallen 51 percent from a year-high of 5,800 yen struck in April. 0100 GMT **SHIMANO UP ON UPWARD PROFIT REVISION**

Shimano Inc up 11.21 percent at 1,756 yen, the second-highest percentage gainer on the first section of the Tokyo Stock Exchange.

Shares in the bicycle parts manufacturer moved up a gear after it revised its profits upwards on Wednesday, traders said.

Shimano says it now expects a group net profit of 11 billion yen for the year to December 31, 2002, up 15.8 percent on a previous forecast of 9.5 billion. 0041 GMT **SUMITOMO RUBBER SOARS ON RECORD PROFIT REPORT**

Sumitomo Rubber Industries Ltd up 7.24 percent at 548 yen, hitting a seven-week intraday high.

Shares in Japan's third-largest tyremaker were snapped up after the Nihon Keizai Shimbun newspaper said it would post a record parent-only net profit of 5.2 billion yen ($44.55 million) for the first half of 2002.

The newspaper said the tyremaker would more than double its February forecast for parent net profit, and also see its operating profit rise 52 percent in the January to June period to a record high of 9.7 billion yen. 0029 GMT **TECHS REBOUND ON U.S. COMEBACK RALLY**

Techs up after a strong rebound on Wall Street ended a three-week sell-off sparked by accounting scandals. The tech-heavy Nasdaq Composite Index snapped back 4.98 percent.

Industry leader Hitachi Ltd up 1.69 percent at 721 yen, after plunging to three-year lows in the previous session.

Kyocera Corp up 3.0 percent at 8,250 yen, bouncing back from a 5.4 percent beating on Wednesday.

Consumer electronics giant Sony Corp up 3.41 percent at 5,450 yen. Sony is set to release quarterly earnings results at 0600 GMT. 0020 GMT ($1=116.70 Yen)