TOKYO, Feb. 4, 2008 (Thomson Financial delivered by Newstex) -- Japanese shares are expected to open lower Tuesday following a downturn on Wall Street overnight, where investors cashed in profits following last week's strong rally.
Uncertainty about the credit crunch, especially in the bond
insurance sector, may also hurt sentiment following a Financial Times report that major private equity firms aren't likely to take part in efforts to shore up the finances of troubled bond insurers Ambac Financial Group Inc (NYSE:AKT) (NYSE:AKF) (NYSE:AFK) (NYSE:ABK) and MBIA Inc. (NYSE:MBE) (NYSE:MBI)
'The direction of the market will continue to be dominated by news and speculation about whether bond insurers can get a rescue plan,' Marusan Securities market analyst Takashi Ushio said.
Domestically, investors will be keeping a close eye on the ongoing quarterly reporting season.
Yamaha Motor and Asahi Breweries today announce their results for calendar 2007, while Mitsubishi Estate (OOTC:MITEY) , Toyota Motor (NYSE:TM) , Hitachi (NYSE:HIT) , Nikon, Sanyo Electric, Tokyo Electron, Orix and Mitsubishi Motors are among the companies due to release results for the December quarter.
'The outcome of the reporting season so far has been mixed and has failed to spark active buying of stocks that have been oversold,' Ushio said.
The Dow Jones Industrial Average closed down 108.03 points or 0.85 percent to 12,635.16 on Monday, while the Nasdaq fell 30.51 points or 1.26 percent to 2,382.85.
On the Tokyo bourse, the Nikkei 225 Stock Average closed up 362.54 points or 2.7 percent at 13,859.70, while the broader Topix rose 27.86 points or 2.1 percent to 1,364.72.
The Chicago-traded Nikkei futures contract was at 13,800 points in late trading, down from 13,830 on the Osaka Securities Exchange on Monday and suggesting a weak start for the market.
Stocks to watch include Takeda Pharmaceutical Co after Japan's biggest drug maker said Monday that it and Amgen (NASDAQ:AMGN) of the US had signed a licensing deal.
Mitsubishi Motors may move on a report that the automaker has decided to shut down its struggling Australian factory as early as next month.
Yamaha Motor Co may draw some interest on a report that the motorbike maker plans to bring a new motorcycle factory on line in Indonesia this year to catch up with market leader Honda Motor Co. (NYSE:HMC)
