Japanese share prices are expected to be firmer this week on selective buying of companies with strong earnings prospects and growing investor confidence in the economic outlook, dealers said. "We expect a steady performance," Kazuhiro Takahashi, equity department chief at Daiwa Securities SBMC, said, adding the key Nikkei index might rise to 11,300 points. "Business prospects at hi-tech companies are not strong but selective buying will still be possible, with no big negative factors seen in the economy as a whole," he said.
Even the dollar's recent slump to 104-105 yen has not dampened sentiment although a stronger yen would tend to raise concerns that it could hurt exporter profits, Takahashi said.
"Given a government survey earlier this year that showed the break-even point for exporters would be the 102-yen range, they still have some room to breathe," he said.
Masatoshi Sato, a broker at Mizuho Investors Securities, said local stocks got a boost Friday after a long holiday brake on the back of gains on Wall Street and the fact that there had been no fresh flare-up in anti-Japan rallies in China.
"Setting aside whether a fundamental solution has been found, the situation in China seems to have calmed down at least for now," Sato said.
Dealers said investors are reasonably confident too on the economic outlook, expecting first quarter growth to be solid.
"They expect the data will wipe out excessive pessimism over the Japanese economy," Sato said.
Analysts expect the world's second-largest economy grew 0.5-0.7 percent or an annualised 2.5-2.6 percent in the January-March quarter, with consumer spending rebounding after the disaster-hit previous three months.
GDP grew a mere 0.1 percent or an annualised 0.5 percent in October-December after contracting in the previous two quarters.
For the week to May 6 with only two trading days, the Nikkei index rose 183.27 points or 1.66 percent to 11,192.17 and the broader TOPIX index of all First Section shares gained 20.83 points or 1.84 percent to 1,150.76. The gains were all accounted for by Friday's jump of 1.78 percent as Tokyo caught up with Wall Street.
Average daily volume was 1.10 billion shares after 1.25 billion shares the previous week while average daily turnover by value rose to 1.20 trillion yen (10.5 billion dollars) from 1.07 trillion yen.
Semiconductor stocks were up sharply on hopes of a price rebound, with Elpida Memory, Japan's largest maker of memory chips, up 170 yen or 4.52 percent at 3,930 yen.
Automakers got a boost from strong US sales data released during the holiday break. Honda Motor rose 140 yen or 2.75 percent to 5,230 yen and Toyota was up 90 yen or 2.34 percent at 3,930.
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