Japanese stocks finished lower Monday. Tokyo was the only major Asian market open amid a slew of regional holidays, as investors braced for key earning results this week from Sony, Honda and other major names.
All the major markets across Asia, excluding Japan, were closed on Monday, with most celebrating the Lunar New Year. Trading in Australia and India was also off due to national holidays.
The U.S. dollar gained 0.4 percent to 89.13 yen as traders who sold it down to a 13-year low last week bought it back ahead of the Fed meeting. Sterling remained under pressure, falling 0.5 percent against the yen, not far from last week's record low and 1.09 percent against the dollar to $1.3650, not far from a 23-year trough set last week. The euro shed 0.6 percent to $1.2903, holding above a six-week low of $1.2764 set last week on the EBS platform, when dismal British and euro zone data led investors to shift money from European currencies to the U.S. currency. Crude oil futures traded below $46 a barrel after OPEC cut back supply.
Japan's Nikkei 225 Average closed 0.8 percent lower, to hit a nearly three-month closing low with fear about earnings fanned by a profit warning from Komatsu and exporters down as the dollar pared gains against the yen.
But losses were slowed as investors snapped up battered shipping firms on the view that they'd been oversold and hopes that Chinese imports might be picking up, while drug firms and other defensive shares rose.
Battered by the global slump, Japan's big exporters have been slashing production, earnings forecasts and jobs, and stock prices have fallen accordingly. Investors will be watching for new earnings downgrades for the fiscal year, which runs through March.
"Markets have been pricing in poor earnings results for awhile now," said Tomochika Kitaoka, a strategist at Mizuho Securities in Tokyo.
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Sony, which last week projected its first annual net loss in 14 years, reports fiscal third quarter results Thursday, followed by Honda Motor on Friday.
But Nomura Holdings, which reports Tuesday, jumped 3.1 percent on hopes that Japan's top brokerage finished writing off costs related to its purchase of failed U.S. investment bank Lehman Brothers' operations in Asia, Europe and the Middle East.
The issue rose despite weekend news reports that third quarter losses at Japan's top brokerage could total a worse-than-expected 300 billion yen ($3.4 billion) for the October-December period.
Australia's market, closed for Australia Day, will reopen Tuesday, as will trading in India, which was observing Republic Day.
Markets in Singapore and South Korea will reopen Wednesday, and Hong Kong's markets will reopen Thursday. Trading in mainland China and Taiwan will be closed all week and resume Feb. 2.