Nikkei may open up as yen resumes slide; investors wary as earnings eyed
TOKYO, July 25 (Reuters) - The Nikkei share average may open slightly higher on Thursday after the yen resumed its downward slide against the dollar, but investors are likely to remain cautious as they wait for the earnings season to confirm that Corporate Japan is in good health. The benchmark Nikkei is likely to trade between 14,650 and 14,850, strategists said, after falling 0.3 percent to 14,731.28 on Wednesday. The broader Topix eased 0.2 percent to 1,219.92. Nikkei futures in Chicago closed at 14,735 on Wednesday, barely changed from the Osaka close of 14,730. "Although a weak yen has positive effects on Japanese equities and the underlying trend is still solid, there are few trading factors to chase higher at the moment," said Hiroaki Hiwada, a senior strategist at Toyo Securities. "I expect the Nikkei to remain range-bound as many investors opt to wait for clear confirmation of corporate earnings growth. They are nervously watching the Chinese stocks also." A weaker yen sharpens Japanese exporters' competitiveness in overseas markets and boosts their earnings when repatriated. The Japanese currency was last traded at 100.34 yen against the dollar, moving away from under 100.00 yen seen at the start of the week after the greenback rallied across the board on Wednesday. Analysts say investors will be watching the corporate results closely for evidence that earnings growth is picking up as the government continues with its aggressive stimulus policies to jump-start the moribund economy. The April-June quarter earnings season got underway this week, though most blue-chip earnings will kick-off only over the coming days. The yen is down 16 percent versus the dollar for the year, weighed by the Bank of Japan's radical monetary stimulus launched in April to end years of stubborn deflations and foster growth. Some of the benefits of a weaker yen are expected to show up in corporate results and their outlooks. The Japanese government's fiscal expansionary policy, coupled with the BOJ's aggressive monetary stimulus, have helped push the benchmark Nikkei up 42 percent this year. > Dow, S&P dip; Apple's jump keeps Nasdaq barely in black > Dollar cheered by U.S. housing data, Treasury yields > Treasuries prices fall as 5-yr auction sees mixed demand > Gold drops 2 percent on improved economic outlook > Oil falls on Chinese manufacturing data, profit taking STOCKS TO WATCH --CANON INC Canon Inc cut its profit forecast for the year to December and trimmed its sales targets for both high-end and compact digital cameras as a slowdown in China and other emerging economies caught the company off-guard. --SUMITOMO MITSUI FINANCIAL GROUP INC Sumitomo Mitsui Banking Corp (SMBC), a core banking unit of Japan's third-largest lender by assets Sumitomo Mitsui Financial Group, said on Wednesday it has agreed to buy Societe Generale's private banking business in Japan for an undisclosed sum.
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