Tokyo stocks seen volatile next week

Tokyo stocks are expected to seesaw next week due to the ongoing uncertainty surrounding European leaders' efforts to tackle the debt crisis, while eyes will also be on Japanese earnings reports.
"Stocks may rise if Europe agrees on a comprehensive plan smoothly to dissolve fears, although it is rather unlikely. Meanwhile, the market's downside would be limited," said Hiroichi Nishi, equity general manager at SMBC Nikko Securities.
In the week to October 21, the benchmark Nikkei 225 index at the Tokyo Stock Exchange fell 69.07 points or 0.79 percent to 8,678.89. The Topix index of all first-section issues lost 4.6 points or 0.61 percent to 744.21.
The market was a hostage to headlines in the week, swayed by positive and negative news and leaders' remarks about the fate of Europe's plan to stabilise the sovereign debt crisis.
Market activities lacked vigor as investors waited to see if European leaders would hammer out a deal to resolve the crisis ahead of a string of key events planned in Europe.
A European Union summit due on Sunday will now be followed by another meeting by Wednesday, as the leaders of France and Germany, who have been at loggerheads over how to resolve the issue, try to forge an agreement. Also drawing attention will be Japanese firms' first half earnings season, which kicks off in the week.
"The impact of the Thai flooding is expected to prompt firms to revise down their outlook (as many firms have factories in the country). But the market has priced in such negative factors to a certain degree," said Masatoshi Sato, senior strategist at Mizuho Investors Securities.
Sato said while Europe remains the biggest focus, investors will also watch economic data giving clues to the impact of the debt crisis on the global economy, including US July-September gross domestic product due Thursday. "As US data released recently turned out to be stronger than expected, the upcoming GDP, if it proves favourable, may help the market to test its upside," Sato added.