directness machinate: Asia Markets: Japan retailers in focus as Asia goes on holiday

By Michael Kitchen, MarketWatch

LOS ANGELES (MarketWatch) ? With 2011 winding to a close, the coming week will likely see weak volumes and many market players out on vacation. But it won?t be entirely quiet, especially for Japanese retailers.

Two major names in Japan?s retail sector ? Takashimaya Co. /quotes/zigman/198259 JP:8233 -0.68% ? /quotes/zigman/198265 TKSHF 0.00% ?and J. Front Retailing Co. /quotes/zigman/457754 JP:3086 -0.28% ? are due to kick off earnings season with their financial results on Monday and Tuesday, respectively.

Department-store operator Takashimaya and retail conglomerate J. Front faced major difficulties this year, including the economic slump that followed Japan?s catastrophic March earthquake and tsunami, but both now appear to be on a profitable course.

Earlier this month, the Nikkei business daily said Takashimaya would post a 20% year-on-year rise for operating profit in the March-November period ? the first nine months of the fiscal year ? thanks to recent cost-cutting and strength in its domestic department stores.

Also this month, J. Front saw its stock-price target raised at Credit Suisse, which said the firm?s March-November operating profit will likely come in 6% above the year-earlier level.

Beyond the earnings reports, the Japanese retail picture should come into sharper focus on Thursday, when the Ministry of Economy, Trade and Industry is due to report November retail sales for the nation.

The October numbers spoke of recovery, with retail sales swinging to a 1.9% rise, compared to a 1.1% fall the previous month. See report on Japan?s October retail sales and other data.

Whether this trend continues will be important, not just for retailers but for Japan as a whole. Last Wednesday, the Bank of Japan said that the economy?s recovery had ?paused? due to weakness abroad, even as conditions were improving domestically. See report on Bank of Japan?s economic outlook.

Over in China, the focus will be on manufacturing data ? specifically, the final results for HSBC?s Purchasing Managers? Index survey.

A preliminary version of the PMI, which included about 85%-90% of responses and was released earlier this month, showed Chinese manufacturing was contracting further in December. See report on HSBC?s ?flash? China PMI results.

The contraction will likely be confirmed in the final results, due out Friday. But on the bright side, the more gloomy the data, the more likely China?s central bank will ease policy to spur growth.

Also notable in the week ahead is the proliferation of holidays. Hong Kong, Australia, and New Zealand are all scheduled to close for Christmas break on Monday and Tuesday, with Singapore, Indonesia and Malaysia also shut Monday.

On Friday, South Korea and the Philippines have market holidays slated.

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