Japanese share prices face another tough week ahead, weighed down by worries over the US economy, a strong yen and a domestic corruption scandal that implicated the finance minister, brokers said Friday.
Over the week to November 16, the benchmark Nikkei-225 index lost 428.81 points or 2.75 percent to close at 15,154.61, after a 5.65 percent drop the preceding week.
The finish was only a shade higher than a 15-month low of 15,126.63 set on November 13. The broader Topix index of all first-section shares ended the week at 1,471.67, down 22.68 points or 1.52 percent.
"The market is likely to feel for the bottom while watching US stock prices, currency rates and earnings reports by biggest banks," said Hiroichi Nishi, a broker at Nikko Cordial Securities.
Investors are waiting for US housing starts data due out next week amid woes over the subprime mortgage sector. The US housing woes spawned fears of a major slowdown in the world's largest economy.
The Tokyo market "may be shaken up" depending on the housing figures, Nishi said. Kazuhiro Takahashi, equity department head at Daiwa Securities SMBC, said "the recent bout of selling could run its course" if investors believe all bad news is out after big banks report their earnings and subprime losses.
"You could expect a rebound but chances are slim," he said, arguing the market needed a cue along the lines of the emergency rate cut by the US Federal Reserve in August.
He said Tokyo share prices would likely sink deeper unless there was a surprise development at weekend events, such as the rare summit of the OPEC oil cartel in Saudi Arabia. Brokers also noted the upcoming week is shortened due to holidays in both Japan and the United States, making investors less willing to take active positions.
A corruption scandal in which Finance Minister Fukushiro Nukaga has been implicated is another damper, Takahashi said. The scandal erupted last month when the defence ministry's recently retired top bureaucrat, Takemasa Moriya, admitted that a military contractor treated him to fine dining, gifts and more than 200 golf trips.
Moriya said Thursday that two former defence chiefs, including Nukaga, joined him at dinners with the contractor, who was arrested last week. Nukaga said he had no memory of joining them.
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