TOKYO: Japan's Nikkei average is expected to open higher and looks set to test the 14,000-mark on Friday, a level not seen since June 2008, after strong US company earnings and resilient labour market data boosted Wall Street.
The Bank of Japan is expected to stand pat at its policy meeting later in the day after it stunned financial markets on April 4 with sweeping stimulus measures that have buoyed Japanese stocks.
The Nikkei is likely to trade between 13,850 and 14,050, strategists said, while Nikkei futures in Chicago <0#NIY:> closed at 13,985 on Thursday, up 0.5 percent from the Osaka close of 13,920.
"The Nikkei will probably test the 14,000 mark today but I'm not sure if it can maintain that level by the end of the day," said Masayuki Doshida, senior market analyst at Rakuten Securities.
"It's ahead of a long weekend and we have US GDP and Japanese earnings. So a lot of investors may want to wait for them before buying more."
Although it is still early in the quarterly reporting season, only two out of the 16 Nikkei companies that have reported so far beat market expectations, data from Thomson Reuters StarMine showed.
Overnight US S&P 500 rose 0.4 percent, driven by stronger-than-expected earnings and a large drop in weekly jobless claims.
The Nikkei advanced 0.6 percent to a nearly five-year high of 13,926.08 on Thursday, and the broader Topix index gained 0.7 percent to 1,172.78.
The benchmark Nikkei has surged 60 percent since mid-November, when Shinzo Abe, who became prime minister in December, promised expansionary monetary and fiscal policies to revive the world's third-largest economy. During the same period, the yen has weakened 24 percent against the dollar.
"It seems unlikely that Japanese equities will repeat their performance of the past five months and after a sharp rally like the one we have just witnessed a pull-back can of course not be ruled out," Legal & General Investment Management wrote in a note.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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