Investors seen sitting on fence ahead of February 8 general election

This week, the Nikkei 225 stock average temporarily lost over 1,000 points on Monday, due to the yen's appreciation against the dollar.

As the currency market stabilised later, the Nikkei average was supported by buying on dips and closed the week at 53,322.85, down 524.02 points, or 0.97 per cent, from the previous week.

Next week, the Nikkei is expected to fluctuate mainly between 52,000 and 54,000 amid a wait-and-see mood, market sources said.

"The outcome of the election is uncertain, so it will be difficult to take positions on both upside and downside," said an official of a bank-affiliated securities firm.

"Investors will likely select individual stocks based on earnings reports while monitoring the US stock market."

Meanwhile, with the Nikkei average standing over 20 per cent above its 200-day moving average, an increasing number of stocks face selling pressure amid a sense of overheating.

"Market participants' behaviour is beginning to change," said an official at a major brokerage firm. "Although stock prices are unlikely to collapse, thanks to strong earnings figures, they are not expected to rise significantly further for now."

Among major Japanese companies, earnings reports from Mizuho Financial Group and Nintendo are scheduled for Monday and Tuesday, respectively.

Toyota and chipmaking equipment maker Tokyo Electron will release their reports on Friday.

In the United States, Google parent Alphabet and Amazon.com will announce earnings figures on Wednesday and Thursday.

The US government will release its closely watched monthly employment report on Friday.

The US Institute for Supply Management's manufacturing and non-manufacturing purchasing managers' indexes will also be released.

[Copyright The Jiji Press, Ltd.]