Nikkei seen firm after G20, earnings in focus

TOKYO (BestGrowthStock) – Japan’s Nikkei is expected to move narrowly on Monday after the weekend meeting of the Group of 20 major economies agreed to shun competitive currency devaluations, spurring expectation that the yen’s further advance will be limited.

The G20 meeting in South Korea resulted in no major policy initiatives, but finance ministers struck a surprise deal to give emerging nations a bigger voice in the International Monetary Fund, recognizing the quickening shift in economic power away from rich Western nations.

Although market analysts expected the market to be firm, they said gains may be limited ahead of the peak of Japan’s earnings season, with a flurry of major companies set to report this week including Canon Inc (7751.T: ) on Wednesday and Sony Corp (6758.T: ) on Friday.

“There’s now this possibility that an aggressive advance in the yen will be limited as the G20 clearly stated they would shun competitive currency devaluations,” said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.

“But the market will likely move narrowly as earnings announcements will come in earnest this week, and the focus is on how companies will set their currency assumption rates.”

Nikkei futures traded in Chicago closed at 9,465, up 0.5 percent from the Osaka close.

The benchmark Nikkei (.N225: ) is likely to move between 9,350 and 9,550, Nishi said.

It rose 0.5 percent on Friday to end at 9,426.71, though it shed 0.8 percent on the week, weighed down by a fall of nearly 2 percent on Wednesday after China unexpectedly tightened credit.

Still, the Nikkei managed to end the week above its 13-week moving average, now at 9,383, which has served as support since September and likely remains as solid support.

Resistance looms at its 26-week moving average, now at 9,630, which has held down the Nikkei for about five months.

In early Asia trade, the dollar was slightly lower against the yen at 81.30 yen.

Wall St posts third straight weekly gain.

Dollar softer after G20 strikes uneasy FX truce.

30-yr improves after month of underperformance.

Gold sets first decline in 12 weeks; G20 in focus.

Oil up in thin trade on German data, dollar.

STOCKS TO WATCH

— KDDI Corp

Mobile phone operator KDDI said it would buy back up to 100 billion yen ($1.23 billion) of its own shares in what could be the second-biggest share repurchase in Japan this year.

— Bridgestone Corp

Japanese tyre maker Bridgestone said on Friday it is targeting an operating profit of 280 billion yen in 2012, up 8 percent from 157 billion yen forecast for this year, by expanding sales globally and cutting costs.

— Honda Motor Co Ltd

Honda said on Friday it was recalling 528,000 vehicles worldwide due to potential problems with a master brake cylinder seal.

Most of the recalled vehicles are Odyssey minivans sold in the United States.

— Hitachi Ltd

Hitachi will join a city development project in Dalian, China, the Nikkei business daily said on Sunday, as Japan’s biggest electronics conglomerate aims to win infrastructure project orders in China.

(Reporting by Aiko Hayashi; Editing by Michael Watson)

Nikkei seen firm after G20, earnings in focus