Japanese shares may lose ground next week

AAP

Surging Tokyo-listed shares may take a breather next week if a meeting of the G20 leading economies offers stiff criticism of the yen's sharp drop, analysts say.

In the past week, the benchmark Nikkei 225 index edged down 0.19 per cent, or 20.67 points, to 11,173.83. The broader Topix index of all first section shares gave up 1.56 per cent, or 14.94 points, to 942.41.

Japan's premier stock exchange zigzagged for much of the week as volatility in the yen helped chart its course, with forex markets set to top the agenda at the G20 meeting that starts on Friday in Moscow.

Japan has been criticised over its monetary policy, pushing down the yen as talk grows over a global currency war in which rival nations drive down their units to protect their exporters.

Since November, the yen has lost about 15 per cent against the dollar and 25 per cent against the euro.

"There is a possibility that the rising trend of Japanese shares may take a breather if a low yen comes under criticism at the G20 meeting," Daiwa Securities said in a note to clients.

"Attention must be drawn to views that Japan will face harsh criticism from other nations at the G20 forum, particularly from emerging markets."

The Bank of Japan on Thursday held off pulling the trigger on fresh policy action, following the announcement of an indefinite easing program last month.

North Korea's nuclear test on Tuesday had little effect on the Tokyo market, as traders said the move had been factored in.

Market sentiment took a hit from poor eurozone economic data on Thursday, while investors were also eyeing upcoming elections in Italy, with former premier Silvio Berlusconi's centre-right party gaining momentum.

In the next week, investors will keep their eyes on US housing data and Japanese trade figures for January.

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