Tokyo stocks seen lower on US, focus on earnings

Tokyo, May 11: Tokyo stocks are seen moving lower on Friday with technology shares such as Advantest Corp. down following a drop in U.S. stocks as disappointing retail sales and a widening trade deficit there aroused worries about the economy, one of the biggest markets for Japanese goods.

Another focus in the market may be Nippon Oil Corp. and Mitsubishi Corp.

The Nikkei business daily said on Friday the two companies will jointly spend $1.2 billion to buy rights to an oil and gas field in the Gulf of Mexico, marking one of the largest such investments by Japanese companies in North America.

In the absence of major news that would encourage buying of stocks, investors are also likely to lock in profits in recent gainers such as metal stocks and other resources shares, said Yutaka Miura, deputy manager of the equity information department at Shinko Securities.

''After a sharply lower opening, investors are likely to closely watch the currency and decide their moves during the day,'' he said.

''The market is also likely to be driven by individual news, especially earnings results.'' In late New York trade on Thursday, the dollar was down 0.1 percent at 119.90 yen.

A stronger yen weighs on exporters as it cuts the value of their overseas sales when converted into the Japanese currency.

Nikkei futures pointed to a fall in Tokyo stocks. Contracts expiring in June closed at 17,530 in Chicago on Thursday, down 240 points from their close in Osaka The Nikkei is likely to move between 17,500 and 17,750 on Friday, market participants said.

The benchmark ended the previous session down 0.06 percent at 17,736.96. On Wednesday it hit its highest close since February's global equity sell-off.

U.S. retailers reported the weakest April sales results on record after cold, stormy weather coupled with an earlier Easter holiday than a year ago, with some chain stores also cutting their earnings forecasts.

The Dow Jones industrial average was down 1.11 percent at 13,215.13.

Japanese companies scheduled to report results on Friday include Ajinomoto Co., Nippon Telegraph and Telephone, Tokyo Electron Ltd. and Dentsu Inc.

STOCKS TO WATCH -- Nippon Oil Corp., Mitsubishi Corp. T> Nippon Oil and Mitsubishi will jointly buy rights to an oil and gas field in the Gulf of Mexico for about $1.2 billion, the Nikkei reported on Friday.

-- Nikon Corp. T> Nikon said on Thursday its annual profit rose 53.2 percent, helped by strong demand for its advanced cameras, lenses and chip-making equipment.

-- Toyota Motor Corp.

Toyota expects to lower costs for hybrid cars enough to be able to make as much money on them as it does on conventional gasoline cars by around 2010, a top executive said in an interview with Reuters on Thursday.

-- McDonald's Japan Q> McDonald's Japan, the nation's biggest fast-food chain, booked a huge jump in quarterly net profit and lifted its forecasts for this year, boosted by the popularity of ''Mega Macs'' and its new ''McGriddles'' breakfast menu.

-- Casio Computer Co. Ltd.

Casio posted an 11.5 percent rise in annual operating profit on Thursday, driven by strong demand for its digital cameras, but it forecast weaker-than-expected growth this year.

-- Takefuji Corp., Acom Co. Ltd.

Both Takefuji and Acom forecast a return to profit in 2007/08 on Thursday after after posting big losses for the previous business yEar following a crackdown on the industry by lawmakers and the courts.

-- Shin-Etsu Chemical Co. T> Shin-Etsu will start making cellulose for pharmaceuticals at a German subsidiary by 2009 to ensure stable supply after production at a cellulose plant in Japan was disrupted earlier this year by a fire, the Nikkei said on Friday.

Reuters