Tokyo investors to weigh eurozone debt, US data

Tokyo stocks are likely to remain under pressure next week due to ongoing worries over the US economy and the European debt crisis, analysts said Thursday. During the three-day week to September 22, the benchmark Nikkei 225 index at the Tokyo Stock Exchange lost 303.90 points or 3.43 percent to 8,560.26.
The broader Topix index of all first-section issues sank 23.59 points or 3.07 percent to 744.54. Tokyo was closed on Monday and will be closed again on Friday for national holidays. "August passed amid worries over the US debt-cap deal and September is passing amid renewed worries over Greece and other European nations' sovereign debt," noted Yumi Nishimura, senior market analyst at Daiwa Securities.
"We are looking for buying pegs after the two months of uncertainty... but large buying on dips would be unlikely to emerge without a clear incentive," she said.
Investors are waiting for a raft of US economic data next week as well as any developments in the European debt crisis, she said, adding positive readings could unleash buybacks.
Policymakers from the Group of 20 industrialised and emerging nations will get together in Washington at the end of this week alongside the IMF's annual meeting there.
But market players do not have high expectations of a breakthrough in resolving the eurozone debt crisis, Nishimura said. Okasan Securities strategist Hideyuki Ishiguro told Dow Jones Newswires that "the situation in Europe will once again dominate market attention" after the much-awaited policy-setting meeting of the US Federal Reserve.
Disappointment over the Fed's $400 billion measure to shore up the flagging economy sent global markets tumbling on Thursday. Daisuke Uno, chief market strategist of Sumitomo Mitsui Banking Corp, said the market "cannot possibly expect a quick solution" for the European woes.
"The economies of Europe and the US are slowing, and there is no prospect for QE3," he said, referring to a third round of US monetary easing. "When European and US shares weaken, it also shakes the ground under Japanese share prices," he said, forecasting the Nikkei would move between 8,350 and 8,650 next week.