TOKYO (Thomson Financial) - Japanese shares are expected to open lower on Monday, tracking declines on Wall Street after a jump in consumer prices raised concerns about how much freedom the Federal Reserve has to continue cutting interest rates.
Concerns emerged after the Labor Department reported its consumer price index had a bigger-than-expected jump for November, with large increases in the cost of clothing, airline tickets and prescription drugs. That raised questions about the Fed's options for priming the economy.
Policymakers last week lowered interest rates and announced a plan to align with other key central banks and offer loans to pressed lenders around the world. But while it wants to stimulate the US economy and make lending easier among banks wary of faltering debt, the Fed also has to keep a watchful eye on inflation.
'Investors are likely to focus on the quarterly results of US financial institutions as well money markets for any signs of stabilisation following the last week's Fed action,' said Mizuho Research Institute analyst Koji Takeuchi.
Goldman Sachs Group Inc, Morgan Stanley and Bear Stearns will report their quarterly result this week.
Meanwhile, Japanese exporters may attract some buying interest on a weaker yen.
The Dow Jones Industrial Average closed down 178.11 points or 1.32 percent to 13,339.85 on Friday, while the Nasdaq composite index fell 32.75 points or 1.23 percent to 2,635.74.
The Chicago-traded Nikkei futures contract settled at 15,490 points, down from 15,530 at the Osaka Securities Exchange on Friday, suggesting a weak start for the market.
On the Tokyo bourse, the blue-chip Nikkei 225 Stock Average closed down 22.01 points or 0.1 percent at 15,514.51, while the broader Topix index fell 14.85 points or 1 percent to 1,501.25.
Ahead today, the Ministry of Economy, Trade and Industry will release its October tertiary industry index 10 minutes before the opening bell, while the Cabinet Office will release its revised leading, coincident and lagging indexes for October in the afternoon.
Stocks to watch include Toyota Motor Corp on a weekend report that Japan's largest automaker plans to boost global production in 2008 to about 9.9 million vehicles, about 500,000 units more than the projected volume for 2007, due to continued robust sales in China, the Middle East and other emerging economies.
Nissan Motor Co may also be in demand on a weekend report that Japan's third largest automaker by sales is negotiating with Chrysler LLC to mutually supply their vehicles under an original equipment manufacturing arrangement.
(1 US dollar = 113.28 yen)
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