TOKYO: Japan's Nikkei is likely to fall on Tuesday, Aug 24 eyeing a break below 9,000 for the first time in 15 months after U.S. stocks weakened as a slew of corporate takeover activity failed to soothe concerns the recovery is stalling.
Nikkei futures traded in Chicago closed at 9,045, down 0.6 percent from the Osaka close.
The 9,000 to 9,100 area for the benchmark Nikkei has been strong support since last year and several attempts this month to break through on the downside to a fresh 13-month low have been checked just under 9,100.
"Today's trade will be about a battle over the 9,000 level. If the Nikkei goes below that, it will completely turn into a sell market, though the speed and degree of the drop will depend on moves in currency rates," said Kenichi Hirano, operating officer at Tachibana Securities.
"There have been no policy steps by the Japanese government to hit the country's stocks. While countries around the world are letting their home currencies weaken to protect their economies, Japan isn't doing anything about its currency."
The benchmark Nikkei is likely to move between 8,900 and 9,150, market players said.
It fell 0.7 percent the previous day to 9,116.69, its lowest close since Nov. 27, 2009, dented by selling from what some market players said were hedge funds and foreigners as worry lingered about the pace of economic recovery and the impact of the strong yen.
The Nikkei was also hurt by disappointment that Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa only spoke over the phone instead of holding a long-expected meeting, and the two simply talked about currencies and the economy and agreed to work closely.
If the Nikkei goes below 9,000, that would take the index to its lowest since May last year. The next support stands at 8,697, a 61.8 percent retracement of the rally between its March 2009 low and April 2010 high.
In early Asian trade, the dollar was steady at 85.17 yen on electric trading platform EBS, within sight of a 15-year low of 84.72 yen this month.
U.S. stocks inched down, pressured by TECHNOLOGY [] shares as a possible bidding war over data storage company 3PAR between Hewlett-Packard Co and Dell Inc sent shares of HP 2 percent lower.
The bid comes on the heels of other deals last week, including acquisition offers from Intel Corp and BHP Billiton.
Analysts said the recent spate of M&A also points to companies continuing to make profits through cost cutting rather than through revenue growth and highlights the economy's weakness. - Reuters
Nikkei futures traded in Chicago closed at 9,045, down 0.6 percent from the Osaka close.
The 9,000 to 9,100 area for the benchmark Nikkei has been strong support since last year and several attempts this month to break through on the downside to a fresh 13-month low have been checked just under 9,100.
"Today's trade will be about a battle over the 9,000 level. If the Nikkei goes below that, it will completely turn into a sell market, though the speed and degree of the drop will depend on moves in currency rates," said Kenichi Hirano, operating officer at Tachibana Securities.
"There have been no policy steps by the Japanese government to hit the country's stocks. While countries around the world are letting their home currencies weaken to protect their economies, Japan isn't doing anything about its currency."
The benchmark Nikkei is likely to move between 8,900 and 9,150, market players said.
It fell 0.7 percent the previous day to 9,116.69, its lowest close since Nov. 27, 2009, dented by selling from what some market players said were hedge funds and foreigners as worry lingered about the pace of economic recovery and the impact of the strong yen.
The Nikkei was also hurt by disappointment that Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa only spoke over the phone instead of holding a long-expected meeting, and the two simply talked about currencies and the economy and agreed to work closely.
If the Nikkei goes below 9,000, that would take the index to its lowest since May last year. The next support stands at 8,697, a 61.8 percent retracement of the rally between its March 2009 low and April 2010 high.
In early Asian trade, the dollar was steady at 85.17 yen on electric trading platform EBS, within sight of a 15-year low of 84.72 yen this month.
U.S. stocks inched down, pressured by TECHNOLOGY [] shares as a possible bidding war over data storage company 3PAR between Hewlett-Packard Co and Dell Inc sent shares of HP 2 percent lower.
The bid comes on the heels of other deals last week, including acquisition offers from Intel Corp and BHP Billiton.
Analysts said the recent spate of M&A also points to companies continuing to make profits through cost cutting rather than through revenue growth and highlights the economy's weakness. - Reuters
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