Nikkei seen touching fresh 7-week low as yen weighs

TOKYO (BestGrowthStock) – Japan’s Nikkei average is likely to inch down to a fresh seven-week low on Tuesday, pressured by the yen’s strength near a record high against the dollar and ahead of a U.S. Federal Reserve policy-setting meeting.

Investors will likely hesitate to take fresh positions as they wait to see the outcome of the Fed’s meeting on November 2-3 and the U.S. mid-term election, and as Japanese markets will be closed on Wednesday for a national holiday, analysts said.

Markets expect the Fed to be very close to resuming an ambitious program of large-scale asset purchases to stir the sluggish U.S. economic recovery out of its doldrums.

“Investors are unlikely to try to move actively after U.S. stocks (Read more about the stock market today. ) ended mixed and in the mood to wait for the Fed meeting, and as the market here will be closed tomorrow,” said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.

“What was behind the fall in yesterday’s trade was the strong yen, and as that hasn’t changed much, the Nikkei will likely move in a tight range around yesterday’s closing level.”

Among individual stocks, Toyota Motor Corp (7203.T: ) will be in focus after the Nikkei business daily reported, citing the company’s local arm, that sales in China fell 6.0 percent in October to 61,600 vehicles, marking the first year-on-year decline in 18 months.

Nikkei futures traded in Chicago closed at 9,140, down 0.2 percent from the Osaka close.

The benchmark Nikkei (.N225: ) is likely to move between 9,050 and 9,250, market players said. It fell 0.5 percent to 9,154.72 on Monday, its lowest close since September 9.

After the Nikkei ended last week below its 13-week moving average around 9,350, which had served as support for more than a month, analysts said the index could next test 9,000, which was last broken on September 8, and then around 8,800, its low for the year.

In early Asia trade, the dollar traded at 80.52 yen, near a postwar historic low of 79.75 yen marked in April 1995.

Japan’s earnings season continues, with major companies such as Hitachi Ltd (6501.T: ) set to report results later in the day and Nissan Motor Co (7201.T: ) and Toyota later in the week.

Market ends flat on eve of US vote, Fed meeting (.N: ) > Focus on Fed, but US poll could have delayed impact (USD/: ) > Treasury price swings are a sign of low volume (US/: ) > Gold backs off 2-week high; eyes US election, Fed (GOL/: ) > Oil rises on Saudi view, Greek incidents, China (O/R: )

STOCKS TO WATCH

— Astellas Pharma (4503.T: )

Astellas, Japan’s No.2 drugmaker, reported a 49.0 percent drop in first-half recurring profit and slashed its outlook for the second time this business year, hit by competition with generic drugmakers and acquisition costs.

— Elpida Memory (6665.T: )

Elpida expects a quarterly profit well short of the market consensus as slowing PC demand pushes down DRAM chip prices and a stronger yen eats into the Japanese PC memory makers’ earnings.

— Sekisui House Ltd (1928.T: )

Sekisui House wants to invest in a $5.3 billion waterfront development project in Sydney being led by Australia’s Lend Lease (LLC.AX: ), the chief executive of Japan’s largest home builder said on Monday.

— Sony Corp (6758.T: )

Sony is seeking to boost its electronics sales in emerging economies by 30 percent in 2010, the consumer electronics giant’s chief financial officer was quoted as saying by the Nikkei business daily.

(Reporting by Aiko Hayashi; Editing by Joseph Radford)

Nikkei seen touching fresh 7-week low as yen weighs