(Repeat of story which first ran on April 20)
By Nathan Layne
TOKYO, April 20 (Reuters) - Tokyo stocks are expected to hold steady this week as investors size up a flood of earnings reports from top consumer electronics manufacturer Sony Corp and other blue-chip firms from both the United States and Japan.
Investors are not expecting the market to gain much ground, but have been encouraged by rises on Wall Street and signs that heavy selling on widely held issues such as Sony and drugmaker Takeda Chemical Industries may be winding down for now.
"The market seems to have already factored in a great deal of bad news and I think we will trade on a firmer footing as attention shifts to the earnings front in Japan," said Hideo Ueki, chief investment officer at UBS Asset Management.
"Sony is the big one, and the market will be disappointed if they forecast a fall in operating profit for the current year. The same can be said for all the top names reporting," he said.
Analysts predicted the benchmark Nikkei average would move between 7,700 and 8,100. It closed the previous week up nearly one percent at 7,874.51, having recovered from a 20-year intraday low of 7,693 hit during Monday trade.
Many foreign investors will be on the sidelines at the start of the week due to the Easter holidays, meaning volumes could be thin. Wall Street was closed on Friday and will reopen on Monday while European markets are taking both Friday and Monday off.
This week also marks the peak of the U.S. earnings season as one-third of the Standard & Poors 500 firms post results. The Nasdaq index jumped five percent last week to a three-month high on the back of better-than-expected earnings from Intel Corp and other bellwether firms.
"Hedge funds were short-selling at the beginning of last week but those shorts stopped coming in as the week wore on," said Koji Muneoka, head of domestic sales trading at HSBC.
"Japanese earnings is their next trading event and they will either buy-back or pile on more shorts depending on the results."
Optical glass maker Hoya Corp kicks-off the reporting onslaught on Monday, followed by Nissan Motor Co Ltd on Wednesday, Sony and NEC Corp on Thursday, and Honda Motor Co Ltd on Friday.
BLUE-CHIP BOUNCE?, SMALL-CAP SHARES
Besides earnings, market players are most focused on whether the recent sell-off of blue chip stocks has run its course.
Fears of selling by private pension funds, which are expected to unload widely held issues before returning the proxy portion of their pension assets to the state later this year, have knocked Takeda and other market heavyweights to multi-year lows.
But Takeda closed Friday at 3,980 yen, compared to a 54-month low of 3,750 hit earlier in the week, while Sony and Fuji Photo Film Co Ltd also ended the week off earlier lows.
"Sentiment wise, it's probably been more than factored in, but clearly the actual selling process has just begun to get underway," said Kathy Matsui, chief strategist at Goldman Sachs.
"I don't expect huge buying to come and drive a sustained rally in those (battered blue chip) stocks, but technically speaking, a few of them are definitely due for a bounce."
Matsui estimates that the return of the proxy portion could generate a maximum of five trillion yen worth of selling pressure, of which one trillion has already been done. As much as two trillion could emerge in the next six months, she said.
Against that backdrop, investors have been pouring money into Internet shopping mall operator Rakuten Inc and other stocks with a relatively small market capitalisation since they are seen less vulnerable to selling by pension funds.
But traders, spooked by the consequent rally in the Nikkei Jasdaq average to a five-month high on Friday are starting to wonder if some of those gains will soon come undone.
"The Jasdaq has performed splendidly, but money now seems to be shifting back to the large-cap shares," said Eri Shimizu, a trader at Jujiya Securities.
DIARY
MONDAY, April 21 -- Firms to announce full-year earnings to include Monex Inc and Hoya Corp .
TUESDAY, April 22 -- Firms to announce full-year earnings to include E*Trade K.K. , Kao Corp and Seiyu Ltd .
WEDNESDAY, April 23 -- Nissan Motor Co announces preliminary full-year earnings results.
THURSDAY, April 24
-- Sony Corp , NEC Corp and Matsui Securities Co Ltd are among firms to announce full-year earnings.
FRIDAY, April 25
-- Government to release March, January-March and fiscal 2002 jobs data; April Tokyo area consumer price index (CPI), March and fiscal 2002 nationwide CPI; March, January-March and fiscal 2002 wage-earners' household spending.
-- Toshiba Corp , Fujitsu Ltd , Advantest Corp , Kyocera Corp , Sharp Corp , Honda Motor Co Ltd and Daiwa Securities Group Inc and Nikko Cordial Corp are among firms to announce full-year earnings.