Asia turns to Japanese earnings (SNE, TOSYY, PC)

Traders will be focusing on Japanese earnings with several tech giants dominating the coming week in Asia. The earnings outlook is grim to say the least as the strong yen has caused severe headwinds for companies with the heavy percentage of sales outside Japan.


Sony Corporation (SNE, quote) is mostly likely the norm with the company already warning a 90 billion yen ($1.2 billion) net loss for the fiscal year ending this March, marking it the eighth disappointment in a row for shareholders.  

Sony’s problem is nowhere near unique as the currency effect with the U.S. dollar is pushing prices up for the company’s exports while competitors in South Korea and elsewhere benefit.

Production problems linked to flooding in Thailand late last year coupled with a slumping demand in Europe will also weigh in the results for Sony and other like Panasonic (PC, quote) and Toshiba (TOSYY, quote).

Analysts are looking for a 41% drop in operating profits for Panasonic when the company reports on Friday.

Other earnings to watch for include Toshiba Corp. and Honda Motor (HMC, quote) on Monday, Sharp Corp. (SHCAY, quote) on Wednesday, and Hitachi Ltd. (HIT, quote) on Thursday.

If indeed Japan’s tech giants stubble as badly as analysts predict, traders can look for negative sentiment to carry across to the U.S. markets.  In 2012, tech has been among the leaders in the U.S. and could be pulled down by such bad news in Asia.

On the flip side, sentiment is so negative that if even one of Japan’s tech giants shows a glimmer of improvement, it could send the sector higher here in New York in the morning.

On the economic data front, traders will get their first look at key manufacturing numbers on Wednesday, with both the government sponsored and privately compiled versions of the Purchasing Managers’ Index.

The economy surveys and earnings will likely move shares in Shanghai and Hong Kong, as well as other Asian bourses — not to mention as their constituents’ ADRs here in the U.S. exchanges.


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