Investors face an uncertain week on Japanese markets as positive corporate earnings at home and abroad may be offset by wider concerns about the global economy, dealers said on Friday.
In the week to July 20, the Nikkei 225 index at the Tokyo Stock Exchange lost 0.62 per cent, or 54.25 points, to 8,669.87.
The broader Topix index of all first-section shares fell 1.67 per cent, or 12.52 points, to 733.82.
"As global stocks are rising on positive earnings reports, Japanese stocks could rise next week as an earnings reports season begins here," said Seiichi Suzuki, strategist at Tokai Tokyo Securities.
"But looking at this week just ended, the demand-supply balance deteriorated, probably because of a negative impact from reports of insider trading," he said.
Suzuki said the size and seriousness of this impact was hard to determine.
Tokyo's bourse was reportedly searching the offices of dozens of brokerage houses as part of a widening crackdown on insider trading, while lawmakers consider tough new rules to curb the illegal but widespread practice.
Suzuki said the benchmark Nikkei index would likely move between 8,400 and 8,900 in the coming week, he said.
Toshihiko Matsuno, senior strategist at SMBC Friend Securities, said positive earnings reports from big US firms such as Apple, Caterpillar and Facebook due next week could support the Japanese stock market.
But the index "is likely to lack a sense of direction" with investors closely watching auctions of Spanish and Italian government bonds as well as US economic indicators, he added.
"If expectations on further monetary easing by central banks rise, that would lead to the yen's appreciation which in turn would hurt market sentiment," he said.
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