TOKYO (AFX) - Share prices are expected to open lower due to emerging worries about the prospects for Japanese technology firms, with investors seen showing strong caution amid the ongoing quarterly reporting season, dealers said.
Anxiety about corporate profits surfaced after Elpida Memory and NEC Electronics warned last week of a steeper decline in the semiconductor chip business.
Advantest Corp, the world's largest maker of testing equipment for semiconductors and flat panel displays, also lowered its year to March net profit forecast due to an expected decline in the price of flash memory chips and sluggish demand from liquid crystal display (LCD) makers for chip testers.
Adding to worries here was an weekend report in the Nikkei that Toshiba Corp may fall on a report that the electronics firm will likely post consolidated operating profit of 250 bln yen in the year to March 2007, short of the initial projection by 20 bln yen because of falling prices for its mainline semiconductors.
The Nikkei also said that due to unabated declines of flash memory chips, Toshiba Corp is also leaning toward postponing the construction of a new flash memory plant, initially due to begin at the end of the year, until 2008 or later.
In the US, the Dow Jones industrial average closed down 15.54 points, or 0.12 pct, at 12,487.02, while the Nasdaq was up 1.25 points, or 0.05 pct, at 2,435.49.
On the Tokyo bourse Friday, the blue-chip Nikkei 225 Stock Average closed down 36.37 points or 0.21 pct at 17,421.93, while the broader TOPIX index of all first-section issues ended the day down 1.38 points or 0.08 pct at 1,728.02.
Ahead in Japan, the Ministry of Economy, Trade and Industry will release 10 minutes before the opening bell retail sales for December.
On the corporate front, Nomura Holdings, Daiwa Securities Group and Mizuho Financial Group will release quarterly results for October-December
Canon discloses business results for the year ended December.
Other stocks to watch include JFE Holdings following a report that its steel making unit unit JFE Steel and Hyundai Steel Co have entered negotiations on a possible comprehensive alliance, including sharing technology for making high-grade automotive steel and possible cross-shareholding.
Mitsubishi Corp may move on a report that the trading house will buy a 17 pct stake in US real estate developer Fairfield Residential LLC for 45 mln usd, or about 5.4 bln yen.
Mitsubishi UFJ Financial may be sold on a weekend report that the Financial Services Agency is preparing to order Bank of Tokyo-Mitsubishi UFJ to suspend new-loan activities in the Osaka region for a predecessor's long-standing involvement with an embezzler.
The Nikkei also reported that in a separate case, the FSA is expected to slap Mitsubishi UFJ Securities Co, the securities unit of Mitsubishi UFJ Financial, with a business improvement order for a regulatory violation in its proprietary trading activities.
(1 usd = 121.55 yen)
yasuhiko.seki@xfn.com