Nikkei likely to falter on yen's strength, lack of catalysts

Mon Aug 5, 2013 7:45pm EDT

TOKYO, Aug 6 (Reuters) - Japan's Nikkei share average is
likely to lose ground for the second day in a row on Tuesday on
the yen's strength against the dollar, while most investors are
expected to hug the sidelines due to the summer lull and lack of
market-moving catalysts.
    Market players said the Nikkei was likely to trade between
14,150 to 14,350 during the session after falling 1.4 percent to
14,258.04 on Monday, giving up some of its 5.8 percent rise over
the previous two sessions.
    Nikkei futures in Chicago closed at 14,250, up 0.1
percent from the close in Osaka of 14,230.
    Investors are expected to remain focused on the earnings
season for direction. 
    Corporate earnings from companies such as Isuzu Motor Motors
Ltd and Suntory Beverage & Food are expected
on Tuesday.
    "Thin trading volume will likely add to investors' concern.
It's due to the summer doldrums," said Hiroichi Nishi, an
assistant general manager at SMBC Nikko Securities. "We may not
see huge selling in the cash market, but if trading volume is
thin, the market is likely to be swayed by futures trading."
    On Monday, volume for both the Nikkei and the Topix 
was the lowest since December 2012.
    For the Topix, only 1.99 billion shares changed hands,
falling below 2.0 billion shares for the first time since
December and was down 23 percent from last week's average daily
volume of 2.6 billion shares.
    Analysts also expect Wall Street's fall overnight to dampen
buying interest, while the U.S dollar's pullback against the yen
is expected to hamper exporters.
    A rise in the yen hurts Japanese exporters' competitiveness
overseas as well as their earnings when repatriated.
    The dollar fell 0.6 percent to 98.31 yen overnight,
and was last traded at 98.33 yen.

    
> Dow, S&P slip from record highs on year's lowest volume 
> Dollar falls vs yen on uncertainty about Fed 
> Bonds fall on strong service data, upcoming supply 
> Gold drops on strong U.S. and UK economic data 
> Oil ends touch lower; upbeat US data offsets supply recovery
 
    STOCKS TO WATCH
    
    --Sony Corp 
    Sony's board voted unanimously not to sell its entertainment
unit, rejecting a proposal from hedge fund manager Daniel Loeb,
the company said in a statement on Monday.
 
    
    --Toshiba Corp 
    Toshiba plans to build a memory chip production factory with
a total investment of 400 billion yen (about $4 billion) with
SanDisk Corp SNDK.O, the Nikkei reported. [ID:nL4N0G63BX}
    
    --Panasonic Corp 
    Panasonic has told NTT Docomo Inc it would stop
supplying new smartphone models from this winter, Kyodo news
service said, citing sources familiar with the matter.
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