Nikkei slips, posts weekly loss of 2.4 percent

The Nikkei average slipped on Friday, posting a weekly loss of 2.4 percent and moving back towards a six-month low hit earlier in the week, after President Barack Obama's US jobs package failed to provide new buying incentives. The Nikkei found support from the settlement level of options and futures, which also lifted trading volume, and from data showing China's inflation cooled.
Investors await the US central bank's policy-setting Federal Open Market Committee meeting on September 20-21 to see if it will adopt further accommodative steps to stimulate the economy. Until then, worries over slowing US economic growth and lack of visibility on how the eurozone debt crisis will play out are likely to keep players from actively building new positions.
"The market will likely be trapped in a fixed range for another week or so," said Yutaka Miura, a senior technical analyst at Mizuho Securities. The benchmark Nikkei slipped 0.6 percent to 8,737.66 but was still well above Tuesday's 8,588, its lowest level since March 15 when stocks were sold off after the earthquake and tsunami. The broader Topix index lost 0.2 percent to 755.70.
Volume was heavy, with 2.2 billion shares changing hands, above last week's average daily trading volume of 1.81 billion. Decliners led advancers 818 to 691 on the main board. Volume was lifted by trading related to the quarterly settlement of options and futures expiring in September. Miura said support for the Nikkei lies at the settlement level of 8,732, while resistance is seen at its 25-day moving average of 8,880.
Japanese stocks opened lower after Obama's speech on Thursday in which he proposed a $447 billion jobs package to boost the US economy and challenged Congress to pass legislation made up largely of tax cuts for workers and businesses. "Obama's plan was in line with expectations, and US stocks are unlikely to rally on it. Uncertainty about the direction of the US economy remains, and this will keep weighing on the Japanese market going forward," said Takashi Ushio, head of investment strategy at Marusan Securities Co.
Chinese data released on Friday lent support to market sentiment across Asia. China's annual inflation cooled to 6.2 percent in August from three-year highs the month before. The result matched expectations and suggested Beijing could pause in its 10-month-long policy tightening campaign. Fanuc skidded 7.6 percent to 10,730 yen and was the heaviest-traded share by turnover, after UBS Securities said economic conditions were weighing on the industrial robot maker's orders. It kept its "neutral" rating on the issue, but cut its 12-month target price to 11,500 yen from 15,200 yen.
Nippon Steel fell 2.2 percent to 226 yen after a Brazilian newspaper reported on Thursday that Brazilian steelmaker CSN is seeking to buy an additional 26 percent of rival Usiminas, which would put it ahead of Nippon Steel as Usiminas' top shareholder. Fast Retailing climbed 1.8 percent to 14,630 yen in heavy trading, after it said it expected a much brighter year, citing a boost from back-to-basics products and its overseas expansion. The issue was the second-most traded share by turnover. Nikon was up 2.6 percent at 1,773 yen after the Nikkei business daily reported it will enter the market for lightweight, interchangeable-lens digital cameras and release its first product with a mirrorless design later this year.