Tokyo stock investors are likely to take their cue in the coming week from US jobs data and currency rates, analysts said. US jobs data for June, due out later Friday, is expected to set the tone at the start of the week. A raft of weak US indicators have fuelled worries about the recovery in the world's biggest economy.
In the week to July 2 the Tokyo Stock Exchange's headline Nikkei index tumbled 533.77 points or 5.48 percent to 9,203.71, although a marginal gain caused by bargain hunting on Friday snapped a five-day losing streak.
The broader Topix index of all first-section shares also fell 36.32 points, or 4.19 percent, to 830.98 during the week.
"If US payrolls data is positive, that could shore up share prices," said Hiroaki Hiwata, strategist at Toyo Securities. But Hiwata expected trading in the week ahead would be range-bound, with the Nikkei index moving between 9,100 and 9,700.
"The yen's relatively high level could eat into exporters' profits, even though the yen's appreciation apparently topped out today (Friday)," he said.
"Concerns over the slowing recovery of the world economy - as suggested in recent US housing and consumption-related data - is weighing on the market."
Nomura Securities said in a report: "As the yen is strong against other major currencies, we need to pay attention to its rates against the euro and other currencies.
"A further appreciation of the yen will spawn concerns over corporate earnings," it said.
The brokerage noted a June survey by the Bank of Japan showed major Japanese manufacturing companies assume the yen will trade at an average of 90.18 to the dollar in the current business year to March 2011.
The assumed rate is stronger than an average 91.00 the companies had expected in March but is still weaker than the current rates seen on the foreign exchange market. The dollar was trading at 88.00 yen in Tokyo afternoon trade.
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