Tokyo stocks are likely to lack clear direction next week, with investors closely watching corporate earnings for further indications of the impact of Japan's March 11 disasters, brokers said. In the week to March 15, the headline Nikkei index at the Tokyo Stock Exchange dropped 1.81 percent, or 176.56 points, to 9,591.52.
The Topix index of all first section issues lost 1.39 percent, or 11.84 points, to 841.29. "Trading is likely to be rangebound with investors looking for further details of the impact on annual corporate results," said Yumi Nishimura, analyst at Daiwa Securities SMBC.
Caution defined trading in the week as investors assess the effects of last month's earthquake and tsunami and the five week-old nuclear crisis at the stricken Fukushima plant.
Stocks were beaten down Tuesday after Japan upgraded its nuclear emergency to a maximum seven on an international scale of atomic crises, the first time the highest ranking has been invoked since the Chernobyl disaster in 1986.
"Concerns over the impact of the disaster on Japanese companies remained unchanged, but some companies have forecast they will be able to recover earlier than expected," Nishimura said.
Hiroichi Nishi, equity general manager at SMBC Nikko Securities, said the impact of the triple disasters will continue to draw the market's focus.
"The dominant view in the market is that Japanese corporate earnings would be revised down for the year ended March and fall in the current business year, and investors are watching for how big the damage could be," Nishi said.
Major US firms are due to release their January-March earnings next week, including IBM, Apple and General Electric. "US corporate earnings are expected to remain upbeat on the back of brisk demand from rapidly growing emerging economies," Nomura Securities said in a note to clients.
"Investors are keeping tabs on the results and outlook of firms highly dependent on Japan, as well as possible impacts from soaring crude oil and food prices," it said.
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