TOKYO: Tokyo investors will be combing through a string of Japanese and Chinese data next week, as the Bank of Japan (BoJ) kicks off a two-day policy meeting.
The barrage of figures, including fourth-quarter gross domestic product (GDP) for Japan and Chinese manufacturing data, come after weak US retail sales sparked more questions about the state of the world’s largest economy. That uncertainty could keep jittery investors on the sidelines, dealers said.
“Stocks could very well stay in an extended consolidation phase” after the soft US data, said Tachibana Securities market analyst Kenichi Hirano.
Investors will also watch the BoJ’s policy board meeting, followed by a Tuesday press conference by Haruhiko Kuroda, the central bank governor. Japan is then set to release trade figures later in the week which are expected to show another yawning deficit, as the country’s post-Fukushima energy imports soar.
“If this leads to yen selling, it might encourage stock buying,” Daiwa Securities said in a client note.
A weaker yen is a plus for shares of Japanese exporters as it boosts their profitability.
Also on investors’ radar screens is the HSBC purchasing managers’ index (PMI) for China, to be released on Thursday, as markets look to gauge the health of the Asia’s biggest economy.
The January figures showed Chinese manufacturing contracted for the first time in six months.
“Caution is needed for possibility of increasing worries about slowdown of China and downward pressure for emerging market currencies,” Daiwa said.
On Friday, the benchmark Nikkei-225 index shed 1.53 percent, or 221.71 points to finish at 14,313.03 as the yen strengthened on the back of poor US data.
The headline index ended the week 1.03 percent lower, falling for the sixth straight week since the start of the year. The Topix index of all first-section shares dropped 1.33 percent, or 15.92 points to 1,183.82. It was down 0.45 percent over the week.
The slump came as traders moved into the yen—seen as a safe-haven currency in times of turmoil—with the dollar fetching 101.69 yen in Tokyo from 102.15 yen in New York City on Thursday. In share trading, Kirin Holdings plunged 9.19 percent to 1,293 yen after the brewer forecast a fall in its fiscal year operating profit.
Sumitomo Rubber fell 3.67 percent to 1,338 yen after US partner Goodyear said that it was dissolving the firms’ longstanding alliance over allegations of anti-competitive behavior.
Canon stock shed 0.39 percent to 3,013 yen after the camera and copier maker said that it would acquire US-based Molecular Imprints to develop a new microchip-making device.