Japanese shares seen turning positive

Japanese share prices are expected to turn around this week as the market gets over a bout of the blues about the state of the economy and focuses on holiday season consumption, analysts said. Over the week to November 24, the Tokyo Stock Exchange's benchmark Nikkei-225 index declined 357.13 points or 2.2 percent to 15,734.60.
The broader TOPIX index on all first section stocks slipped 35.5 points or 2.25 percent ending at 1,538.04.
Japan said this week that it broke its post-war boom record with corporate profits and business sentiment is on the rise. But the outlook was tempered by weak private consumption and a strong yen, which hurts exporters. Despite the week ending on a negative note, analysts were optimistic that the market mood will improve.
"It's not because the fundamentals are weak that investors were selling Japanese shares," said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center.
"The market has understood that it oversold Japanese shares. As a result shares have reached the bottom line, and the only direction they can take is upwards," he added.
Analysts said that traditional end-of-the-year bonuses were expected to cover up the flat private consumption reported in this week's Cabinet Office report.
"It's true that solid corporate earnings income doesn't seem to be reflected in income or consumption," said Ryuta Otsuka, market research head at Toyo Investment Securities.
"But large bonuses are expected to come in December, which will cover weak private consumption," he added.
Friday was the traditional start of the holiday shopping season in the United States, the all-important market for Japanese exports.
"Market players will watch how Americans spend their money on Black Friday, which is a test as to how the US economy is faring," Nakai said.
Hedge funds also report their earnings this week, which could give a boost to shares.
Analysts expected shares listed on the Nikkei-225 to move within a range of 15,600 to 16,000 points. This week Japanese investors will have their eyes on the Tankan business sentiment survey out on December 15 for clues on the outlook on the economy and interest rates.
"Although we were disappointed with half-year earnings reports, we have quite high expectations for this one, and if good figures come out hopefully they will lift our confidence that was on the verge of being lost," Otsuka said of the Tankan report.