Japanese shares should remain steady this week on hopes domestic land prices have ceased to drop but trading will start off cautiously before a key US central bank meeting, analysts said. Japanese markets will be closed Monday for a public holiday. Traders expect the US Federal Reserve to raise short-term interest rates at its policy-setting Federal Open Market Committee (FOMC) meeting on Tuesday amid growing concerns that record high crude oil prices could hurt global growth.
Market sentiment could be hurt if the Fed suggests continued rate hikes at a faster pace to counter inflation, but at the same time the Fed's resolve to fight inflation could sooth investors, analysts said.
"If the volatile oil prices prompt the Fed to change its post-FOMC statement, it could push up long-term interest rates and hurt stock markets," said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center.
Meanwhile, the market expects the government's report due Wednesday to show land prices in January either stopped dropping or started to gain from a year earlier after 13 years of declines, indicating deflation is coming to an end.
"The market expects to see the rising land prices in wider areas in Tokyo. Investors have already been buying related stocks including real estate developers and banks," said Nakai.
Fumiaki Nakanishi, market research head at SMBC Friend Securities, said some transport shares would gain ahead of the opening Friday of the six-month World Exposition in Aichi western Japan.
Nakai forecast the Nikkei index would trade between 11,600 and 12,000 and Nakanishi said it would move between 11,800 and 12,500 in the coming week.
For the week to March 18, the Tokyo Stock Exchange's benchmark Nikkei-225 index fell 44.08 points or 0.37 percent to 11,879.81.
During the week just ended, the broader TOPIX index of all First Section shares added 3.26 or 0.27 percent to 1,203.26.
Average daily volume stood at 1.78 billion shares, down from 2.14 billion shares a week earlier. Average daily turnover by value was 1.37 trillion yen (13.1 billion dollars), also down from 1.72 trillion yen. Among contractors, Shimizu rose seven yen or 1.24 percent to 573 yen, with Kajima up four yen or 0.87 percent at 463 yen. Obayashi lost 13 yen or 1.82 percent to 703 yen.
Mizuho Financial Group rose 5,000 yen or 0.95 percent to 534,000 yen and Mitsubishi Tokyo Financial Group was down 7,000 yen or 0.73 percent at 958,000 yen. UFJ Holdings fell 6,000 yen or 1.03 percent to 576,000 yen.
Sony gained 50 yen or 1.19 percent at 4,260 and Sharp was up 11 yen or 0.68 percent at 1,619 yen.
Comments
Comments are closed.