Tokyo shares opened softer yesterday as players searched for fresh incentives and waited for Western markets to reopen after Christmas holiday breaks.
Tokyo shares were expected to stay within a tight range amid a dearth of fresh news. Major European and United States markets were closed for the Christmas holidays.
The London bourse will remain closed today (NZ time).
Once international investors return to the market, they will focus on United States economic data, Daiwa Securities analyst Yumi Nishimura said.
US stocks markets ended the pre-holiday week by booking solid gains, after five sessions during which trade was marked by a rare slowdown in bad news from Europe and further evidence of a US recovery.
The major indices began the week in the red, amid lingering concerns that the European Central Bank would not step in to stop the euro zone rot.
But they managed to eke out solid gains by Friday's close.
While the Frankfurt-based central bank continued to shy away from backing indebted sovereigns, it did open lending windows for European banks, which helped ease panic.
AFP reported Chinese shares were weighed down by concerns over whether policymakers would further ease monetary policy after cutting bank reserve levels earlier this month for the first time in three years, to revive a slowing economy.
Tokyo's rise tracked a lift in Wall St late last week as dealers across the Pacific reacted to upbeat US economic data and a move by politicians to extend temporary tax breaks and unemployment benefits, ending earlier Republican threats to block the moves.
In New Zealand, the focus will turn to listed retailers who started reporting a lift in sales before Christmas.
Extended sales between now and January 3 should give a lift to sales figures for companies such as The Warehouse, Michael Hill, Briscoes, Hallenstein Glasson and Kathmandu. However, margins are likely to be squeezed as competition is intense for the consumers' dollar.
Forsyth Barr issued another downgrade for children's clothing retailer Pumpkin Patch. Broker Suzanne Kinnaird said it the downgraded forecasts from last month were too high.
"We are downgrading our forecasts further, mainly due to an increased loss in the United Kingdom, given the deteriorating environment there."
Her full-year 2012 forecast falls from $11 million to $9.5 million, down 13%.
The company's valuation falls 3c to $1.42 a share.
The UK retail environment continued to worsen, with some reports suggesting up to 5500 retail sites could be vacated by distressed retailers. In that environment, Pumpkin Patch's UK loss was likely to blow out further than anticipated, Ms Kinnaird said.
In the UK, a leading centre-left think tank warned the crisis in the euro zone and sapped consumer confidence risked sending Britain into a new recession.
Britain faced a "bleak" start to 2012 but any potential slowdown could be dampened by a fall in inflation, which would boost consumer spending power, according to the Institute for Public Policy Research (IPPR).
"As we enter 2012, it seems the word that best describes the outlook for the UK economy is 'bleak'," the think-tank's chief economist, Tony Dolphin, said.
