Tokyo investors to eye Japan earnings, data next week

TOKYO, Jan 24 (AFP): Tokyo investors will keep a close eye on Japanese corporate earnings next week with Nintendo, Honda and Japan Airlines among those reporting, while economic data will also be in focus.

"In the (coming) week...corporate announcements will get into full swing as firms release their April-December earnings," Daiwa Securities said in a client note.

"We note the possibility of upward revisions of many corporate earnings. Investor spirits may be brightened by the mix of a (possibly) weaker yen and a higher dollar."

But economists are bracing for Monday's release of December trade data, which is expected to show a ballooning deficit after a record shortfall in November fuelled by Japan's soaring energy bills.

Later in the week, Japan publishes inflation, factory output and unemployment data.

Dealers will also keeping a close eye on US housing and GDP figures, as well as a Federal Reserve policy meeting to see if it announces further cuts to its stimulus programme.

On Friday, Tokyo's benchmark Nikkei-225 index fell 1.94 per cent, or 304.33 points, to close at 15,391.56, driven down by the yen's strength and worries over emerging economies after weak Chinese data. The Nikkei lost 2.18 per cent over the week.

The broader Topix index of all first-section shares fell 1.78 per cent, or 22.92 points, to finish at 1,264.60 on Friday. It gave up 2.53 per cent over the week.

"There is no panic, but some players are definitely taking money off the table in light of the Nikkei's faltering upward momentum, and a good chance for profit-taking in banks and real estate shares," an equity trading director at a foreign brokerage told Dow Jones Newswires.

The yen benefited as a safe-haven currency as US shares sank on Thursday following a weak report on Chinese manufacturing activity and lacklustre US corporate earnings.

The Dow Jones Industrial average slumped 1.07 per cent.

Banking giant HSBC said preliminary results showed manufacturing activity in China contracted sharply in January, adding to recent concern about the world's number two economy.

In late Friday forex trade, the dollar bought 103.25 yen, against 103.34 yen in New York Thursday afternoon, and well below the mid-104 yen level in Tokyo.

A stronger yen is negative for Japanese exporters as it makes them less competitive abroad and erodes profits when repatriated.

Nissan slipped 0.21 per cent to 932 yen after a report by the Nikkei business daily that the Japanese automaker and France's Renault are planning to boost their alliance.

The pair would bring together their production as well as research and development in a bid to save about $3.8 billion annually, it said.

Sony shares edged down 0.05 per cent to 1,763 yen, Japan's biggest bank Mitsubishi UFJ tumbled 1.93 per cent to 660 yen and Uniqlo clothing chain operator Fast Retailing fell 1.57 per cent to 38,215 yen.