TOKYO, June 21 Japan's Nikkei average is
expected to open lower on Friday, taking its cue from a shakeout
in global markets overnight as investors fretted about the
Federal Reserve's plan to scale back massive stimulus in coming
months if the U.S. economy improves.
The Nikkei is likely to trade between 12,600 and
13,000 after dropping 1.7 percent to 13,014.58 in the previous
session, strategists said. The broader Topix index fell
1.3 percent to 1,091.81 on Thursday.
Nikkei futures in Chicago closed at 12,805 on
Thursday, down 1.7 percent from the Osaka close of
"It's impossible to avoid the intensive trend of risk
aversion. The Tokyo market will drop today," said Takashi
Hiroki, chief strategist at Monex Inc. "But the downside will be
limited. The Tokyo stock exchange already reacted sharply
Hiroki said when investors were on "risk-off" mood in the
past, the yen would strengthen against the dollar, but the
dollar has firmed this time, which will support Japanese
equities as a softer yen will benefit the shares of exporters.
Global equity markets, bond prices and commodities fell
sharply on Thursday as investors struggled to come to terms with
the Fed's plan to eventually stop pumping cheap money into the
economy next year - removing liquidity support that has
underpinned financial assets in recent years.
The benchmark Nikkei has lost 18.4 percent since hitting a
5-1/2 year peak on May 23 on concerns over Fed stimulus as well
as slowing growth in China, Japan's second-largest export
market, and disappointment over Prime Minister Shinzo Abe's
recently unveiled growth strategy to revive the economy.
Japanese equities' 12-month forward price-to-earnings has
also come down sharply, from a three-year high of 16.3 reached
three weeks ago to 13.6, a level not seen since the Bank of
Japan launched radical monetary stimulus steps in early April,
according to Thomson Reuters Datastream.
Still, the index is up 5.3 percent since the BOJ
announcement and has risen 25 percent this year, underpinned by
the sweeping government efforts to pull the economy out of two
decades of stagnation.
> Wall St plunges, S&P posts biggest drop since Nov 2011
> Dollar gains across the board on Fed outlook, U.S. data
> U.S. bond market slides as Fed plans become clearer
> Gold dives 5 pct in global market rout on Fed fears
> Oil hit by biggest decline since November on Fed plan
STOCKS TO WATCH
Sprint Nextel Corp, which SoftBank is trying to taking
control, raised its buyout offer for Clearwire Corp to
$5 per share on Thursday and announced support from a key group
of dissident shareholders, trumping rival suitor Dish Network
--ITOCHU CORP, MITSUI & CO LTD
Japanese trading houses Itochu and Mitsui will invest a
combined $1.5 billion in BHP Billiton's Jimblebar iron
ore mining hub in Australia, the world's largest miner said on
--MITSUBISHI UFJ FINANCIAL GROUP
The Bank of Tokyo-Mitsubishi UFJ, owned by Mitsubishi UFJ
Financial Group, has agreed to pay New York state $250 million
for deleting information from $100 billion in wire transfers
that authorities could have used to police transactions with
sanctioned countries like Iran.
Nomura, Japan's biggest brokerage firm, flagged redundancies
in its Australian equities team, in an internal memo seen by