Japanese share prices are likely to continue their rapid ascent next week and may reach 17,800 points for the first time since May 2000 on hopes of solid company earnings, dealers said Friday.
At the same time, however, there are some concerns that the market may be overheating, which could lead to profit-taking, they added.
For the week ending April 7, the Tokyo Stock Exchange's benchmark Nikkei-225 index rose 503.71 points or 2.95 percent to 17,563.37, the highest closing level since July 10, 2000.
The broader TOPIX index of all first-section shares gained 55.56 points or 3.21 percent to 1,783.72, levels last seen in November 1991.
"Japanese shares seem set to push up to the 17,800 points level no matter what economic news comes out next week," said Ryuta Otsuka, strategist at Toyo Securities.
Japan will release machinery orders for February and the Cabinet Office's economic watchers survey for March on Monday.
Market expectations for the upcoming results season are growing more positive, which is likely to continue pushing share prices higher, Otsuka said.
He said the market will also look to the United States where some corporations will release results for the first quarter of 2006 including Advanced Micro Devices and General Electric.
The Bank of Japan (BoJ) holds a two-day monetary policy meeting through Tuesday, the first since it abandoned its deflation-fighting monetary policy.
Although the central bank is not expected to end its zero interest rates yet, investors will be looking carefully for any clues from BoJ governor Toshihiko Fukui in his press conference Tuesday on when rates will rise.
The Nikkei index rose 40 percent in 2005 on a wave of interest by foreign investors and is up about nine percent so far this year.
After such swift gains, a correction could come at some point, dealers said.
"There is wariness about the rapid rise in the market and there is a risk of adjustment," said Masatoshi Sato, senior strategist at Mizuho Investors Securities.
"The key for next week will be the US financial markets reaction to the US employment report," said Sato.
The market was expecting Friday's US non-farm payroll report for March to show job creation of 190,000 and a steady unemployment rate of 4.8 percent.
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