Japanese share prices will likely remain weighed down next week as investors expect the dollar's weakness against the yen to continue, analysts said Friday. "Basically we expect the share prices will stay under pressure next week," said Daisuke Uno, chief market strategist of Sumitomo Mitsui Banking Corp. "We expect the yen will also remain strong."
In the week to September 24, the headline Nikkei index lost 154.42 points, or 1.60 percent, to 9,471.67. The Topix index of all first section shares of the Tokyo Stock Exchange fell 13.68 points, or 1.61 percent, to 838.41. The strong yen has pressed on Japanese stock prices as it hurts the key export sector by making their products more expensive overseas and shrinking the value of their foreign earnings when repatriated.
Japan stepped into the currency markets on September 15 for the first time since 2004 after the yen hit a fresh 15-year high of 82.86 against the dollar, leading to criticism from some politicians in Europe and the United States.
Tokyo has repeatedly said it is ready to act again in currency markets if necessary. But the US Federal Reserve's policy-making committee said on Tuesday that it was prepared to take new stimulus measures if necessary, boosting selling pressure on the dollar.
Seiichi Suzuki, market strategist at Tokai Tokyo Securities, said market players would be looking to the Bank of Japan's key Tankan business survey next week as well as keeping an eye on corporate earnings.
Uno added: "I think the sentiment among small and medium-size companies will shrink for the time being." Suzuki said "external factors such as the prospect of the US economy" may also weigh on sentiment.