Nikkei may hold steady; corporate earnings, outlook in focus
TOKYO, July 23 (Reuters) - Japan's Nikkei average may open steady on Tuesday as the yen's rally against the dollar paused, with investors turning their attention to corporate earnings to assess the outlook as the government continues its aggressive campaign to revive the economy. The benchmark Nikkei is likely to trade between 14,550 and 14,750, strategists said, after gaining 0.5 percent to 14,658.04 on Monday. The broader Topix advanced 0.4 percent to 1,216.53 in the previous session. Nikkei futures in Chicago closed at 14,675 on Monday, down 0.1 percent from the Osaka close of 14,690. "I expect the Nikkei to remain range bound just like yesterday. It probably won't rise or fall much," said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management. "Looking more closely at individual stocks, investors will be cherry-picking shares as their focus has already shifted to corporate earnings." The yen's moves could also influence the equity market. The Japanese currency's strong gains against the dollar came as investors, who had already priced in the victory of Prime Minister Shinzo Abe's ruling bloc and sold the yen against the dollar in advance, locked in profits after the election. The dollar was last at 99.59 yen, from 99.53 yen in late New York trade on Monday. The Japanese currency, however, was still down 15 percent versus the dollar for the year, weighed by the Bank of Japan's radical monetary stimulus launched in April to jump-start the moribund economy. Abe's ruling Liberal Democratic Party and its coalition partner won decisively in the upper house election held on Sunday, opening the door for him to pursue tough reforms required for a sustained economic recovery. The government's fiscal expansionary policy, coupled with the BOJ's aggressive monetary stimulus, have helped push the benchmark Nikkei up 41 percent this year. Analysts said the prospect of the Nikkei building on its gains after the election will depend on whether Abe can implement drastic structural reform.
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STOCKS TO WATCH --MITSUBISHI MOTORS CORP The Nikkei business daily said Mitsubishi Motors will likely post a 7 percent gain in group operating profit to about 16 billion yen for the three months ended June 30. The carmaker is scheduled to announce its April-June results on July 30.
--NIPPON EXPRESS CO LTD Nippon Express, a general transport company, announced on Monday that it will offer a voluntary layoff programme to trim its workforce by up to 800 employees. As the company's latest earnings forecast for the fiscal year through March doesn't include related costs, Nippon Express said it will spell out the likely impact on its earnings later.