Nikkei set to fall for 3rd day as yen strengthens
TOKYO, July 26 (Reuters) - Japan's Nikkei share average is set to fall for a third day on Friday as a firmer yen hurts investor sentiment, while a focus on quarterly earnings results may keep trading volumes thin. Market players said the Nikkei was likely to trade between 14,300 and 14,550, after falling 1.1 percent to 14,562.93 in the previous session. Nikkei futures in Chicago closed at 14,360, down 1.1 percent from the close in Osaka of 14,520. The first-quarter earnings season is at its peak, but investor sentiment has turned sour on the results after companies like Canon Inc and Shin-Etsu Chemical Co disappointed the market, analysts said. "Trading may be led by futures as many investors are reluctant to take positions in the cash market until they see all the earnings outcomes," said Yutaka Miura, a senior technical analyst at Mizuho Securities. Investors will also monitor whether the dollar holds above 99 yen during the day, given a greater focus on dollar-yen levels as exporters release their results. A weak yen lifts exporters' competitiveness overseas as well as their profits when repatriated. "If the dollar trades below 99 yen again, futures may be sold sharply," Miura said. The dollar last traded at 99.25 yen. Japan's June core consumer price index, released at 2330 GMT, came in at 0.4 percent, just above forecasts for 0.3 percent. According to a Reuters poll last week, Japanese consumer prices likely increased in June and did so at the highest annual pace in nearly five years, as prospects of an economic recovery allow companies to gradually pass on rising costs to consumers.
"A rise in CPI would be a positive sign for 'Abenomics'," said Hiroichi Nishi, an assistant general manager at SMBC Nikko Securities, speaking before the data was released. "If the figure is above the consensus, the Nikkei's declines will be limited."
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--Nissan Motor Co Nissan beat expectations with a 14 percent rise in quarterly net profit on Thursday after stronger sales in the United States helped offset a sluggish performance in its key Chinese market.
--Suzuki Motor Corp Maruti Suzuki India Ltd, 56.2 percent owned by Suzuki Motor, posted a 49 percent jump in first-quarter net profit as a drop in sales volumes was offset by cheaper imports from Japan due to a decline in the value of the yen.