Tokyo shares to track earnings

Japanese share prices will take their cue from local corporate results due next week with the market remaining cautious due to the Middle East crisis, dealers said Friday. Japan's blue chip companies including Sharp, Canon, Matsushita, Sony, NEC and Nissan Motor will announce their first quarter results next week.
For the week ended July 21, which was shortened to four days due to a public holiday on Monday, the Tokyo Stock Exchange's benchmark Nikkei-225 slipped 23.98 points or 0.16 percent to 14,821.26.
The broader TOPIX index of all first-section shares lost 6.18 points or 0.41 percent to 1,515.53.
"Investors will be hunting for individual shares that are backed by strong earnings but the earnings are not expected to raise the index as a whole," said Hiroaki Hiwada, strategist at Toyo Securities.
The Nikkei 225 index was dragged down below the 15,000-point level on worries over the spiralling violence in the Middle East, which has left many dead and triggered a spike in oil prices to record levels.
Kazuhiro Takahashi, equity general manager at Daiwa Securities SMBC, said that the Nikkei index will return to the 15,000-point level if the Middle East calms down and earnings come in strong.
"If the situation in the area cools down, US stocks are expected to rebound and the global market environment will turn around from the current growing risk aversion," Takahashi said.
Investors will also be watching Japanese economic indicators such as June trade statistics and the consumer price index (CPI). The Cabinet Office's monthly economic report for July dropped the word "deflation" in its description of the economy, the first time it had done so in five years and only days after the Bank of Japan ended its unusual policy of zero interest rates.
"Since the Bank of Japan just raised its interest rate, market attention on the CPI is small, unless the index is surprisingly strong," Takahashi said.
Dealers will be also waiting for the US Federal Reserve's Beige Book and housing data next week for any hints on further rate hikes in US.
Takahashi of Daiwa Securities SMBC forecast the benchmark Nikkei-225 will trade between 14,700 and 15,200 points, while Hiwada of Toyo Securities givens a wider forecast of between 14,500 and 15,500 points.