TOKYO: Tokyo investors next week will be looking for more clues about the state of the United States (US) economy, while Japanese trade data due on Monday mark the latest measure of Tokyo’s growth-boosting plan.
In the week to Friday, the benchmark Nikkei 225 index rose 0.26 percent, or 34.92 points to 13,650.11, while the broader Topix index of all first-section shares added 0.15 percent, or 1.74 points, to 1,142.65.
The Tokyo market seesawed for much of the past week with many market players out of action during a Japanese summer holiday.
But with a mixed bag of fresh data on the US economy this week, dealers will be looking for more evidence that the Federal Reserve is getting ready to pull back on its massive stimulus plan, known as quantitative easing.
“If US Fed tapering proceeds, a great deal more air is likely to come out of equities markets generally, which will naturally spell more selling for Japan shares,” said a director of equity trading at a foreign brokerage.
While a pull back on the Fed scheme would mean the world’s largest economy is on firmer footing, the move could spook investors since the easy money plan has been credited with helping support global equity markets.
Despite those fears, the Nikkei may still be an attractive buy, the trading director added.
“The Nikkei 13,000 mark represents a good entry point for a lot of foreign investors who see current market values as interesting, but not compelling enough to commit capital amid uncertainty over government fiscal policy and lower liquidity levels,” the director said.
Questions have been swirling about whether the administration of Japanese premier Shinzo Abe will approve planned sales tax hikes seen as crucial to bringing down Tokyo’s huge national debt. There are fears the tax rises would stall Abe’s efforts to boost the world’s third-largest economy.
On Friday, the Nikkei closed 0.75 percent lower, tracking losses on Wall Street, where US shares suffered as Cisco and Walmart turned in weak earnings reports.
At the same time, a strong improvement in weekly unemployment insurance claims pointed to a brighter outlook for the jobs market. “The jobs data was a shock to the market, and put the whole tapering issue back on the front burner again,” Hiroichi Nishi, SMBC Nikko Securities general manager of equities, told Dow Jones Newswires.
In stock trading, Panasonic lost 1.52 percent to 845 yen while Uniqlo clothing chain operator Fast Retailing slipped 0.31 percent to 32,000 yen.
Some shares benefited from bargain-buying, with Fuji Heavy Industries up 1.65 percent at 2,461 yen.
On currency markets, the dollar stood at 97.46 yen, up from 97.36 in New York City on Thursday.