Tokyo stocks are likely to stay under pressure in the coming week, with worries over the European debt crisis underpinning the safe-haven yen's strength and hurting Japanese exporters, analysts said.
The Nikkei 225 index at the Tokyo Stock Exchange ended the week amid disappointment over the European Central Bank's announcement of no immediate measures to stem the turmoil.
In the week to August 3, the benchmark index dropped 0.13 percent or 11.53 points to 8,555.11, while the Topix index of all first-section issues slipped 0.34 percent or 2.5 points to 723.94.
Investors were now awaiting US payrolls data due out later Friday.
A positive surprise in the jobs data could boost share prices but "the market is rather hoping for bad figures that could increase chances of monetary easing", said Toshihiko Matsuno, senior strategist at SMBC Friend Securities.
The Federal Reserve's policy-setting board announced no new stimulus despite it downgrading its assessment of the US economy.
The ECB announced no immediate measures either, despite expectations of new action after its chief Mario Draghi said last week the bank would do whatever it takes to support the embattled euro.
"The ECB decision disappointed," Matsuno said.
"Draghi lost confidence as he tried to control markets but failed to live up to expectations," he said. "The market is likely to continue to show negative reactions... until something concrete is announced."
The worries over Europe kept the Japanese currency strong, which reduces export revenue when repatriated.
Investrust CEO Hiroyuki Fukunaga said the effect of the strong yen on corporate earnings was "undeniable".
"There really is no reason to believe that the currency market pressure is going to let up any time soon, putting severe strain on exporters' ongoing competitiveness," he told Dow Jones Newswires.
Possible support for the market next week may include hopes for Chinese credit easing amid slowing inflation, Nomura Securities said in a weekly note.
Also investors will pay heed to "whether the Bank of Japan (BoJ) will go ahead with additional monetary easing", at a two-day meeting to Thursday, it said, adding upcoming corporate results should also merit attention.
SMBC's Matsuno said "chances are low" that the BoJ will announce further monetary easing "especially when the economic outlook isn't so good".