Japan's Nikkei average extended falls today after closing below a key support level and booking its biggest weekly loss in a month last week, and market players see the next target near six-month lows hit earlier this month.
The technical picture has darkened for the Nikkei, with its MACD turning down after a sustained rise, while its stochastic, which gives near-term signals on market trends, is flattening in an oversold zone.
The benchmark Nikkei slipped 0.3 per cent to 9,705.08, while the broader Topix fell 0.5 percent to 862.70.
Wall Street finished almost unchanged on Friday, though financial stocks gained on relief that a financial regulation bill would not crimp Wall Street profits as badly as feared.
On Friday the Nikkei fell 1.9 per cent to 9,737.48, its lowest close in two weeks and below its 25-day moving average of around 9,780, a proxy for a one-month moving average that is keenly watched in Japan. It shed 2.6 per cent on the week.
After the Nikkei's break below its 25-day moving average, market players say support now lies near a six-month low hit earlier this month just below 9,400.
Stock investors are anxiously awaiting June jobs data due on Friday for clues on how the US economy is weathering recent storms that drove Wall Street's major indexes down for the year.
There was a muted impact from the weekend meeting of the Group of 20 rich and developing economies, at which world leaders agreed to take different paths towards ensuring lasting growth and making their banking systems safer.
The market slipped broadly, with blue-chip exporters leading the fall.
Toyota fell to a 15-month low after news it was recalling and temporarily halting sales of its 2010 Lexus HS250h hybrid sedan due to a potential fuel leak problem.
The stock was down 1.3 per cent at 3,095 yen, after earlier dropping as low as 3,080 yen.
But shares of Laox, a Japanese electronics retailer controlled by China's Suning Appliance and a Shanghai-born entrepreneur, rose 1.9 percent to 105 yen after its CEO said the firm is eyeing expansion beyond the two big stores at the core of its three-year growth plan.
Teijin gained 1.1 per cent to 283 yen after the Nikkei business daily said the firm will supply carbon fibre composite material to European planemaker Airbus from fiscal 2011.
Reuters