Japanese shares will likely gain support from good corporate earnings next week, while investors were watching a G20 meeting that aims to help settle the global currency dispute, dealers said Friday. In the week to October 22, the Nikkei index of the Tokyo Stock Exchange fell 73.54 points, or 0.77 percent to 9,426.71.
The Topix index of all first section shares dropped 1.5 points, or 0.18 percent to 824.88. A meeting of finance ministers and central bankers from the Group of 20 industrialised and large developing nations kicked off in South Korea on Friday for two days to discuss ways to curb sharp foreign exchange movements.
"The single most important issue is whether the yen will depreciate" against the dollar after the gathering, Yutaka Miura, senior technical analyst at Mizuho Securities, told Dow Jones Newswires.
Investors have worried about the strength of the yen, which is trading at 15-year highs against the dollar, making Japanese goods less competitive overseas and weighing on exporters. Aehad of the talks US Treasury Secretary Timothy Geithner urged his G20 counterparts to "commit to refrain from exchange rate policies designed to achieve competitive advantage by either weakening their currency or preventing appreciation of an undervalued currency." Cosmo Securities strategist Toshikazu Horiuchi said growing criticism of a lower dollar among emerging economies may help reverse the weak dollar trend, which would ostensibly benefit Japanese stocks. He put the Nikkei resistance for next week at 9,800.
"Overall sentiment on the outlook for Japanese corporations is not bad," Kenichi Hirano, operating officer at Tachibana Securities, said, adding that attention is geared more towards full fiscal year forecasts.