Traders sold, then bought, then sold stocks again in the week ended on Friday as the dollar flamed out against the yen.

After beginning the week on a decidedly negative note, a wave of optimism over government plans to revitalise the country's weak banks swept the Nikkei more than six percent higher on Wednesday.

But as the dollar tanked on Thursday, the Nikkei coughed up all those gains amid concerns dollar weakness would weigh on the earnings of globalised Japanese companies.

As tired traders shuffled out of their offices for the weekend, the Nikkei was stuck just above a 13-year low at 12,879.97, off 343.72 points or 2.6 per cent for the week. With the dollar still volatile -- it fell about 22 yen in a 48-hour period -- traders and analysts say Japan's global blue chips, like Sony Corp and Canon Inc, will take the brunt of more selling amid expectations earningsforecasts will be slashed.

The dollar traded around 116.70 yen in late afternoon."No one will be able to ignore the impact this is going to have on their earnings," said Masayuki Nishina, a trader at New Japan Securities. "If the companies calculated at between 120 and 130 (yen), they're looking at lower results."As the dollar falls, Japanese exports are more expensive abroad, limiting sales.

Conversely, dollars earned on overseas sales buy fewer yen when repatriated, cutting into earnings.

Concerns that Wall Street stocks would be dragged down by worries that the US economy may be on the verge of sliding into recession -- fears heightened by recent comments from Federal Reserve Chairman Alan Greenspan -- also weighed on the Tokyo market.

A slumping US economy is bad news for many of Japan's big exporters. Such worries dragged exporters like Bridgestone Corp and Honda Motor down by double-digit per centages to fresh year lows.

"The profit environment for global companies has be comemore volatile,"said a trader at a US securities house.

Other factors in the market:

On Monday, underwriters will determine the final price for the initial public offering of Nippon Telegraph & Telephone's DoCoMo mobile phone company.

On Tuesday, the Bank of Japan (BOJ) holds a regular monetary policy meeting. On Thursday, the ministry of finance will release current account data for August and fund flow data.

On Friday, the Bank of Japan releases minutes of Policy Board's Sept 9 Monetary Policy Meeting.