Tokyo shares outlook - Lower on Wall St decline; weak yen seen supportive

Tokyo shares outlook - Lower on Wall St decline; weak yen seen supportive

	Published : Mon, 22 Jan 2007 23:45 By : Agencies Print this Story

TOKYO (XFN-ASIA) - Share prices are expected to open lower in a knee-jerk reaction to the downturn in technology shares on NASDAQ and sustained losses in the Dow, dealers said.

Lingering worries over the strength of profit growth at US technology firms will continue to keep a lid on the Japanese market after Intel's and Apple's outlooks last week missed market expectations, they said.

But a weak yen, which now stands at a multi-year low against the dollar and an all-time low against the euro, is likely to provide some downside support, by enhancing expectations for Japanese exporters reporting stronger-than-expected third quarter results and upgraded full year profit forecasts, dealers said.

Elpida Memory, Nintendo and NEC Electronics will report their third quarter to December results later this week.

In the US, the Dow Jones industrial average closed down 88.37 points, or 0.7 pct, at 12,447.16, while the Nasdaq was down 20.24 points, or 0.83 pct, at 2,431.07.

In Chicago, the Nikkei futures contract settled at 17,380 points from 17,410 at the Osaka Securities Exchange yesterday, suggesting a softer start for the Tokyo market.

On the Tokyo bourse yesterday, the blue-chip Nikkei 225 Stock Average closed up 113.74 points or 0.66 pct at 17,424.18, while the TOPIX index of all issues listed on the Tokyo Stock Exchange's first section ended the session up 16.12 points or 0.94 pct at 1,730.33.

Ahead in Japan, the Bank of Japan will release minutes from the policy board meeting on Dec 18-19.

Stocks to watch include Nippon Oil Corp after Japan's largest oil refiner said it and SK Corp of South Korea have agreed to form a business and capital partnership to improve their competitiveness and increase growth.

Mitsubishi Motors Corp may move after the automaker said it will launch its first-ever flexible fuel vehicle, which runs on gasoline, ethanol or a mixture of the two, in Brazil by March, 2008.

Mitsubishi Heavy Industries Ltd may advance on a report that the engineering firm plans to produce lithium-ion batteries for electric and hybrid cars and market them to automakers at home and abroad by 2010, to take advantage of an expected surge in demand for environment-friendly vehicles.

(1 usd = 121.64 yen)

yasuhiko.seki@xfn.com