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Tokyo - The weekend IMF-World Bank meetings and their outlook on the global economy will be in focus for Japanese investors when their return to trading next week.
The Washington meetings are likely to focus on how to shore up growth in the world's top economies as the US Federal Reserve pulls back on its stimulus, while its counterparts in Japan and Europe consider fresh easing measures.
"Attention is being paid to what comments come from senior government officials, especially after the most recent (Fed policy meeting) minutes expressed concerns about a strong dollar," said Shinichiro Kadota, vice-president of the research department at Barclays in Tokyo.
The Fed minutes released Wednesday showed the policy committee is worried about weak foreign economic growth and the strong dollar, with officials dampening expectations for an earlier-than-expected interest rate hike.
Investors are also watching for Chinese trade data on Monday and US housing starts later in the week.
On Friday, Tokyo stocks slipped 1.15% to a two-month low after losses on Wall St. The Nikkei 225 index at the Tokyo Stock Exchange fell 178.38 points to finish at 15 300.55, its lowest since mid-August.
The index lost 2.60% over the week, following a 3.21% dip the previous week.
The Topix index of all first-section shares lost 1.40%, or 17.69 points, to end at 1 243. Over the week it fell 3.08%.
"It's been a disastrous week," said an equity trading director at a European brokerage.
"Against the backdrop of worsening economic data from Europe and the potential volatility accompanying US earnings reporting season, many investors are simply anxious to close out positions and take a break before the upcoming three-day weekend."
Japanese markets are closed on Monday for a national holiday.
Data showed Thursday that German exports slumped 5.8%, while four leading think tanks also slashed their growth forecasts for the eurozone's largest economy.
Also, International Monetary Fund chief Christine Lagarde said there was a growing chance of the eurozone slipping back into recession if action is not taken to prevent it.
The uncertainty sparked buying of the safe-haven yen, which in turn put pressure on Japanese exporters.
The dollar, which touched a six-year high above ¥110 last week, was struggling at ¥107.81 in Asia Friday, compared with ¥107.84 late in New York.
In stocks trade, heavily weighted Fast Retailing helped fend off a more severe decline in the Nikkei.
Shares in the Uniqlo clothing stores operator closed up 1.70% at ¥37 890 after rising 1.50% Thursday on an upbeat outlook for its stores outside Japan.
All Nippon Airways shares fell 0.81% to ¥242.9, while Canon dropped 1.19% to ¥3 379.
