Tokyo: Tokyo investors will be looking to a Bank of Japan policy meeting this week and more corporate earnings, after a slate of negative news took a toll on global markets.
On Friday, Tokyo stocks closed down 0.63 per cent following a sell-off on Wall Street, but the weakening yen may help keep the Japanese market in positive territory, analysts said.
The benchmark Nikkei 225 index lost 97.66 points to finish at 15,523.11 on Friday, but it added 0.42 per cent over the week.
The Topix index of all first-section issues also slipped 0.63 per cent, or 8.12 points, to close at 1,281.30. It was flat on the week, edging down 0.05 points.
The prospect of an early US rate hike has boosted demand for the dollar and weakened the yen, a plus for Japanese shares because it inflates the profitability of exporters such as Sony and Toyota.
US stocks fell sharply on Thursday in a broad sell-off with the Dow Jones Industrial Average tumbling 1.88 per cent, erasing all its gains since the end of 2013.
Among the sentiment-dampening news was weak Eurozone data and Argentina’s debt default.
Caution also held buying in check before Friday’s release of a key US jobs data.
Tokyo’s benchmark Nikkei hit a six-month high earlier this week on solid Japanese corporate earnings but analysts were split over whether the Tokyo market would sustain the rise.
Shigeo Sugawara, senior investment officer at Sompo Japan Nipponkoa Asset Management, said the negative impact of an April sales tax hike may have been overstated.
“We are examining the negative effects [of the sales tax increase], but they aren’t as bad as previously thought,” he said.
Recovering economy
“Japan’s catching-up hasn’t finished yet.”
Hajime Kitano, chief equity strategist for Japan at Barclays Securities Japan, cast doubt on the Nikkei pushing higher.
Given Wall Street’s slide, “it’s hard to imagine Japan alone keeps rising,” he told Dow Jones Newswires.
Bank of Japan governor Haruhiko Kuroda reiterated in a speech Friday that the Japanese economy was continuing to recover and drops in domestic demand after the tax rise would ease later this year.
The bank holds a two-day policy meeting next week.
In share trading, Skymark Airlines tumbled 10.52 per cent to 187.0 yen after the budget airline, embroiled in a row with Airbus over a cancelled jet order, said its quarterly loss had ballooned.
The stock has lost over one third of its value in the past few sessions.
Sony rose 4.68 per cent to 1,855.0 yen after the electronics giant posted a surprise first-quarter net profit thanks to brisk sales of its PlayStation 4 console and a weak yen.
SoftBank fell 1.25 per cent to 7,477.0 yen after French upstart telecom operator Iliad said it was bidding for a controlling stake in US carrier T-Mobile, offering an alternative to a potential tie-up with rival Sprint, which is owned by SoftBank.
In currency trade, the dollar was at 102.93 yen, up from 102.80 yen in New York Thursday afternoon.