Japan's key benchmarks may fall for the first week in four on concern a Bank of Japan survey will show business confidence rose at a slower pace in September.
Manufacturers such as Advantest Corp may lead declines.
"Markets are primed for another leg down," said John Litschke, who helps manage US$600 million in global equities at Loomis Sayles & Co in San Francisco. "Domestic demand is still sluggish and stagnant global demand will likely squash any optimism" for corporate earnings growth. Litschke said his fund is buying Canon Inc and Nissan Motor Co.
In the holiday-shortened week just ended, the Nikkei 225 Stock Average gained 0.5 percent to 9,530.44, while the Topix index rose 1 percent to 936.22. The Nikkei gained 4.4 percent in the past three weeks, while the Topix added 4.7 percent.
In other markets, shares of South Korean companies that rely on sales to the US, such as Samsung Electronics Co, may fall as investors bet US reports on jobs and manufacturing next week may signal weakening demand from exporters' largest overseas market.
In Hong Kong, developers may decline on concern the government won't take steps to shore up property prices soon enough to counter more supply coming into the market.
Australian retailers, such as Coles Myer Ltd, may gain on optimism a government report will show August retail sales grew for a 10th month in 11.
Stocks across Asia may also decline after the Standard & Poor's 500 Index and other US stock indexes tumbled Friday, recording their fifth straight week of declines, on concern corporate earnings are rebounding slower than analysts had expected.
Philip Morris Cos, the world's largest cigarette maker, and drugmaker Wyeth cut their profit forecasts, and analysts at Credit Suisse First Boston and Lehman Brothers lowered their ratings and 2003 profit estimates for General Electric Co, the biggest company by market value, following its comments that business is more difficult than it expected.
"People are pretty gloomy about the state of the economy," said Katherine Schapiro, who manages US$650 million in international stocks at Strong Capital Management in San Francisco.
China stock markets are closed next week for the Labor Day holidays, while Hong Kong is closed on Tuesday and South Korea is closed on Thursday for public holidays.
Quarterly report
The Bank of Japan's quarterly Tankan index will probably show companies that depend on overseas sales are less confident about demand from the US, Japan's biggest export market.
The index, which measures business conditions at large manufacturers, probably rose just 4 points to minus 14 in September, according to a Bloomberg News survey. That compares with a record 20-point gain in June. The report is due Tuesday.
Advantest, Hitachi Ltd and NEC Corp are among companies that have slashed their earnings forecasts in the past month, citing slowing demand for personal computers and mobile phones in the US.
Products of computer-related companies account for about a quarter of Japan's exports.
Slowing US economic growth may result in "significant downward revisions" among Japanese exporters, said Barry Dargan, who helps manage US$490 million in Japanese equities at MFS Investment Management.
Mizuho Holdings Inc. and other banks may extend a three-week, 19 percent rally on signs that the central bank and the government will soon implement measures to help lenders dispose of an estimated ?52.4 trillion (US$428 billion) in non-performing loans.
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