Nikkei seen pressured by yen rise; earnings eyed

TOKYO (BestGrowthStock) – Japan’s Nikkei average is likely to face selling pressure on Friday after the yen regained ground against the dollar, but is expected to trade in a tight range before a blizzard of earnings reports due after the close.

Investors will be cautious about taking fresh positions ahead of the weekend and before a series of results from the likes of Sony Corp (6758.T: ), Honda Motor (7267.T: ), Panasonic (6752.T: ) and Nomura Holdings (8604.T: ).

“The yen’s strength is a bit worrying. A further advance in the yen would put pressure on the Nikkei,” said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.

“But the Nikkei will struggle to find a clear direction today before earnings today. The market also doesn’t want to take big positions ahead of the Federal Reserve’s decision next week,” Nishi said.

The benchmark Nikkei (.N225: ) is expected to move between 9,250 and 9,450, market players said.

On Thursday, the Nikkei closed down 0.2 percent at a six-week closing low of 9,366.03.

Nikkei futures traded in Chicago closed at 9,355, down 0.2 percent from the Osaka close of 9,370.

The Nikkei will come under pressure as the dollar approaches a 15-year low of 80.41 yen and a post-war historic low of 79.75 yen marked in April 1995.

The dollar was trading around 81.00 yen in early Asian trade after hitting a two-week high of near 82 yen on Wednesday.

The Nikkei’s topside is seen capped at the 25-day moving average, now seen at 9,478, Nishi said.

Still, the Nikkei is seen supported at the upper level of its daily Ichimoku cloud near 9,300, but its technical trend will deteriorate if it closes below that level, analysts said.

(Reporting by Chikafumi Hodo; Editing by Chris Gallagher)

Nikkei seen pressured by yen rise; earnings eyed