Nikkei set to fall on US jobs, may dip below 10,000

Chartwise, the market is showing signs of short-term overheating, with the index more than 5 percent above its 25-day moving average of 9,649.

"Investors are cautious about overheating in the Tokyo market and selling is expected in early trade. But they want to see the outcome of US earnings this week before building bigger positions," said Yumi Nishimura, a senior market analyst at Daiwa Securities.

US non-farm payrolls rose by only 18,000 jobs in June, well below expectations, and at odds with encouraging labour market numbers earlier in the week.

Investor attention will now turn to earnings, with aluminium producer Alcoa Inc kicking the season off on Monday.

Nikkei futures in Chicago ended at 10,045, 115 points lower than their Osaka close of 10,160.

The Nikkei closed up 0.7 percent at 10,137.73 on Friday while the broader Topix gained 0.4 percent to 874.34.

The index is expected to trade between 9,950-10,100 on Monday, analysts said.

Copyright Reuters, 2011