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Nikkei may hold steady; corporate earnings, outlook in focus
July 22, 2013 / 11:35 PM / 4 years ago

Nikkei may hold steady; corporate earnings, outlook in focus

TOKYO, July 23 (Reuters) - Japan's Nikkei average may open
steady on Tuesday as the yen's rally against the dollar paused,
with investors turning their attention to corporate earnings to
assess the outlook as the government continues its aggressive
campaign to revive the economy.
    The benchmark Nikkei is likely to trade between
14,550 and 14,750, strategists said, after gaining 0.5 percent
to 14,658.04 on Monday. The broader Topix advanced 0.4
percent to 1,216.53 in the previous session.  
    Nikkei futures in Chicago closed at 14,675 on
Monday, down 0.1 percent from the Osaka close of 14,690.
    "I expect the Nikkei to remain range bound just like
yesterday. It probably won't rise or fall much," said Mitsushige
Akino, chief fund manager at Ichiyoshi Asset Management.
    "Looking more closely at individual stocks, investors will
be cherry-picking shares as their focus has already shifted to
corporate earnings."
    The yen's moves could also influence the equity market. The
Japanese currency's strong gains against the dollar came as
investors, who had already priced in the victory of Prime
Minister Shinzo Abe's ruling bloc and sold the yen against the
dollar in advance, locked in profits after the election.
    The dollar was last at 99.59 yen, from 99.53 yen in late New
York trade on Monday.
    The Japanese currency, however, was still down 15 percent
versus the dollar for the year, weighed by the Bank of Japan's
radical monetary stimulus launched in April to jump-start the
moribund economy.  
    Abe's ruling Liberal Democratic Party and its coalition
partner won decisively in the upper house election held on
Sunday, opening the door for him to pursue tough reforms
required for a sustained economic recovery.
   The government's fiscal expansionary policy, coupled with the
BOJ's aggressive monetary stimulus, have helped push the
benchmark Nikkei up 41 percent this year.
    Analysts said the prospect of the Nikkei building on its
gains after the election will depend on whether Abe can
implement drastic structural reform.
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    The Nikkei business daily said Mitsubishi Motors will likely
post a 7 percent gain in group operating profit to about 16
billion yen for the three months ended June 30. The carmaker is
scheduled to announce its April-June results on July 30.
    Nippon Express, a general transport company, announced on
Monday that it will offer a voluntary layoff programme to trim
its workforce by up to 800 employees.
    As the company's latest earnings forecast for the fiscal
year through March doesn't include related costs, Nippon Express
said it will spell out the likely impact on its earnings later.

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