Exporters such as Sony Corp and Canon Inc may help Japanese stocks rebound in the coming week as a slumping yen against the dollar boosts expectations for sales during the US Christmas season.
Nippon Telegraph & Telephone Corp, Ito-Yokado Co and other companies that rely on the health of the domestic economy may drop. Government reports in the past week showed Japan's October household spending fell and that the economy may shrink in six months. A central bank report on Dec. 13 may show a majority of companies are pessimistic about business prospects, according to a Bloomberg News Survey.
"A weaker yen will keep investors focused on exporters at a time when there are significant question marks on the outlook for the domestic economy," said Ian Burden, chief investment officer at Invesco Asset Management (Japan) Ltd, which manages about US$2 billion in Japanese equities. "Japan's anemic recovery has all but stalled."
Elsewhere in Asia, Hong Kong companies such as Giordano International Ltd. may decline after the government said October retail sales dropped for an eighth month.
South Korea's Shinhan Financial Group Ltd may rise after the nation's fourth-largest financial group offered to buy the government's entire stake in Chohung Bank, a bid some analysts say edges the one from a group led by Cerberus Partners LP, which wants a partial stake.
Chipmakers may gain after an industry report said sales will increase next year for the first time in three years.
For the week, the Nikkei 225 Stock Average fell 3.8 percent, its biggest weekly drop since the five days ended Oct. 25. The TOPIX index lost 3.6 percent, its biggest weekly decline in two months.
Sony, which gets a third of its sales from the US, on Friday said demand for its digital cameras in the US over the Thanksgiving weekend beat its expectations.
The world's second-largest consumer electronics maker adds between ?6 billion (US$48 million) and ?8 billion in annual operating profit for every ?1 drop against the dollar.
Japanese government officials this week indicated they favor a weaker currency to help bolster an export-led economic recovery.
The yen weakened to as low as ?125.6 to the dollar, its biggest weekly drop in at least 12 weeks.
hong kong
In Hong Kong, Giordano, which runs a casual wear chain throughout the region, may drop. Retail sales in the city fell 2.7 percent in October from a year ago, the government said after the market closed on Friday.
"Hong Kong's retail business is tough because of deflation," said Alex Wong, a director at Rexcapital Asset Management Ltd. "If the economy is going to pick up, it should be led by exports."
Wong said Rexcapital doesn't own any retail stocks and favors exporters such as Pacific Andes International Holdings Ltd, which sells seafood and vegetables to Europe and North America.
south korea
South Korea's Shinhan may gain. The lender offered cash and shares for Chohung, while New York-based Cerberus and its partners offered cash for a 51 percent stake, the Ministry of Finance and Economy said. The ministry declined to disclose their offer price.
"It's positive that Shinhan seem to have better position in winning the bid as the merger effect will be greater," in terms of providing more efficient retail banking services, said Eun Hyo Sang, who manages US$115 million at Chohung Investment Trust Management Co in Seoul.
Samsung Electronics Co, the world's biggest maker of computer-memory chips, may rise after industry researcher IDC forecast sales of semiconductors used in computers will grow 8.9 percent next year after no growth this year and a 35.5 percent decline last year.
In Taiwan, Taiwan Semiconductor Manufacturing Co (台灣積體電路公司), the world's largest supplier of made-to-order chips, may also gain.
singapore
Singapore Telecommunications Ltd may rise after Southeast Asia's biggest phone company said its US$2 billion Asian-wide cable signed up a new customer, Communications Authority of Thailand. Markets were closed on Friday.
Westpac Banking Corp and shares of other Australian lenders may decline on concern they will lower their profit forecasts at their annual meetings next week because of falling investment income.
Westpac Bank, Australia's third-largest lender, has its annual shareholder meeting on Dec. 12 while rivals Australia & New Zealand Banking Group Ltd. and St. George Bank Ltd will hold their meetings the following day.
Commonwealth Bank of Australia last month said it will report a flat first-half profit because of lower investment returns at its fund management business. The benchmark S&P/ASX 200 Index has dropped 12 percent so far this year.
Commonwealth Bank's announcement "raised the risk awareness in the investment community," said Shawn Burns, who helps manage US$17 billion at Deutsche Asset Management Australia Ltd. "Equity markets are down and that's beyond their control."
He declined to say whether he was changing his holding of bank stocks.
Australian banks and insurers face a "less favorable" credit rating outlook because of the risk of slowing economic growth and investment market volatility, Standard & Poor's said on Thursday.
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