TOKYO: Tokyo investors will be looking to a Bank of Japan (BoJ) meeting next week as speculation grows that an economic downturn will force policymakers to pull the trigger on more stimulus.
If the central bank expands its 80 trillion yen ($665 billion) annual asset-buying scheme—similar to the Federal Reserve’s quantitative easing—it would likely weaken the yen further, which is a plus for Japanese exporters.
That, in turn, could boost buying of shares in those firms.
Many economists expect the bank will hold off further easing until later in the year, despite growing signs that Japan fell into recession during the third quarter.
But all eyes will be on BoJ chief Haruhiko Kuroda after the bank’s two-day meeting, which wraps up Wednesday.
“The market will focus on what governor Kuroda will say at the Wednesday press conference in terms of whether he sees a need for further easing steps,” Daiwa Securities said.
US jobs data to be released later Friday will also set the tone for trading next week as the Federal Reserve lurches towards hiking rates for the first time in almost a decade.
Traders see an improving labor market as a key factor supporting the Federal Reserve’s plan to raise near-zero interest rates.
“If the jobs number is strong, then an interest rate hike will look more likely, and if it’s too weak, the market will think the US economy is weak,” Soichiro Monji, chief strategist at Daiwa SB Investments, told Bloomberg News.
On Friday, the benchmark Nikkei 225 index at the Tokyo Stock Exchange edged up 0.02 percent, or 2.71 points, to 17,725.13.
The flat finish ended a tumultuous week that saw the Nikkei plunge over four percent Tuesday, following painful losses across markets in the US and Europe as downbeat Chinese economic data hit prices of key commodities such as oil and copper.
It then staged a two-day rally before Friday’s lackluster session, ending the week down 0.87 percent.
The broader Topix index of all first-section shares edged up 0.15 percent, or 2.18 points, to end at 1,444.92 on Friday. It lost 0.61 percent over the week.
In Tokyo share trading Friday, automaker Nissan advanced 1.52 percent to 1,167.5 yen on a solid monthly US sales report, beating market forecasts.
Supermarket giant Aeon climbed 2.11 percent to 1,959 yen, while telecom firm SoftBank fell 0.07 percent to 5,625 yen, recovering from a drop of more than one percent by the lunch break.
Japan Tobacco rose 0.55 percent to 3,593 yen, after the stock took a hammering in recent days as investors dismissed its $5.0 billion purchase of a US-cigarette brand as too pricey.
On currency markets, the dollar edged up to 120.06 yen from 119.93 yen Thursday in New York.