Tokyo stocks look to build base after volatile trade

Worries about the US economy are likely to cast a cloud over Japanese share prices next week but even so some dealers said Friday they are optimistic that the market may have found a bottom for now.
For the week to March 16, the Tokyo Stock Exchange's benchmark Nikkei-225 declined 419.89 points or 2.45 percent to 16,744.15, giving a loss of 2.80 percent since the start of the year.
The broader-based TOPIX index of all first-section companies shed 53.25 points or 3.08 percent to 1,677.06. Many stock market strategists have remained unwaveringly optimistic during the recent global market plunges and this week is no exception.
"I think stock prices fell to a bottom nearing the 16,600 level for the Nikkei-225 and it's time for investors to begin to buy back," said Hiroaki Hiwata, strategist at Toyo Securities. "There is no serious concern about the domestic economy so individual investors should come back to the market," he said.
But Hiwata said a shortage of major players as well as some concerns over the outlook of the US market would cap the upward movement of share prices.
"Institutional investors will not be able to trade actively as now is the time to prepare for the end of the financial year this month," he said. "Prospects for the US economy are another concern, so some investors may take a wait-and-see position ahead of the (Federal Reserve monetary policy) meeting next week," he added.
Hopes that world stock markets were out of the woods were dented this week after Japanese share prices tumbled 2.92 percent on Wednesday alone as investors fretting about more signs of trouble in the US housing market. Kenichi Azuma, an analyst at Cosmo Securities, was upbeat about the outlook for Tokyo stock prices next week.
"There is a good chance of seeing the Nikkei aim at higher levels next week as the market managed to absorb another wave of global turmoil," he said.
"In general, buying tends to pick up toward the end of March as investors try to secure dividends by holding shares at this time," said Azuma. "This trend may help raise shares next week."
On the domestic front, Bank of Japan monetary policymakers gather on Monday and Tuesday of next week but they are widely expected to leave interest rates on hold at 0.5 percent after February's quarter point hike.