Nikkei hits 7-week low, eighth straight day of decline
TOKYO (Reuters) - Japan's Nikkei stock average dipped ever so slightly for its eighth straight day of declines and its lowest close in seven weeks on Friday, as caution prevailed over upcoming corporate earnings and economic indicators.
Investor confidence about the pace and strength of a recovery for the global economy has waned since weak U.S. jobs data this month, which bolstered the view that a rally in Tokyo shares since March had been overdone.
The pain was exacerbated this week after the dollar fell to a five-month low against the yen, with the benchmark losing 5.4 percent on the week for its steepest weekly decline since late January.
Some analysts said more the Nikkei could lose more ground as it has broken 9,500, which was roughly the bottom of its trading range since early June and a key support level
"There could be a fall to below 9,000," said Yutaka Miura, senior technical analyst for Mizuho Securities. The bottom end of the Nikkei's range next week is likely to be 8,800, near its 200-day moving average, he said.
The Nikkei .N225 dipped 3.78 points in moderate trade to 9,287.28, its lowest closing level since May 22, led lower by shippers such as Kawasaki Kisen (9107.T) after a key sea freight index .BADI hit a hit a six-week low.
The broader Topix eased 0.2 percent to 872.50.
Traders and analysts say a retreat to around 9,000 would not be a surprise, given that the Nikkei had surged to an eight-month intraday high of 10,170.82 in June and is up more than 30 percent from a trough hit in March.
"This pullback is a transition before progressing to the next step and is not at all bad," said a senior trader for a Japanese brokerage house. Next week, the focus will be on U.S. corporate earnings and U.S. economic indicators including industrial output, as well as the outcome of an election for the Tokyo Metropolitan Assembly on Sunday.
Moves to oust unpopular Prime Minister Taro Aso are seen likely to intensify if his ruling bloc fares badly.
The main opposition Democratic Party is ahead of Aso's long-ruling Liberal Democratic Party in opinion polls ahead of the closely watched local election, mirroring its lead for the upcoming national election.
Although the benchmark dipped, advancing stocks outnumbered declining ones 833 to 749.
Gainers included Tokyo Electron (8035.T), the world's No. 2 chip equipment maker, which edged up 0.7 percent to 4,270 yen after orders climbed 82 percent in April-June from the previous quarter.
ABC Mart (2670.T) rose 2.2 percent to 2,565 yen after the shoe retailer said first quarter operating profit rose 7.3 percent, helped by aggressive store openings and strong sales growth in ladies shoes after expanding and marking down its offering of cheaper brands.
Trade was moderate on the Tokyo exchange's first section, with Continued...
