Tokyo shares seen firm as investors return to market

Japanese share prices are likely to hold firm this week as domestic investors return to the market from summer vacation, following recent signs the country's economy is on the mend, dealers said.
They said the benchmark index had hit a four-year high Tuesday before succumbing to profit-taking in the afterglow of upbeat assessments last week of the Japanese economy by the government and central bank.
"There is no reason to sell shares for domestic investors who will come back this week as the world economy as well as Japan's economy are seen strong despite high crude oil prices," said Seiichi Suzuki, market analyst at Tokai Tokyo Securities.
"Domestic investors have to buy shares anyway, as they had sold much to lock in profits before taking the summer vacation this week," he added.
For the week ending August 19, the Tokyo Stock Exchange's benchmark Nikkei-225 index edged up 30.05 points or 0.25 percent to finish at 12,291.73.
The broader TOPIX index of all first section shares rose 5.37 points or 0.43 percent during the week to close at 1,250.50.
Japan said last week its economy grew 0.3 percent in the three months to June from the previous quarter, marking a third straight quarter of expansion that was seen as solid despite missing economists' forecast of 0.5 percent.
Fujio Ando, senior executive director of Chiba Bank Asset Management, said investors were expecting some companies soon to announce upgrades in their profit projections for the first half to September.
"Especially sectors such as steel makers, oil refiners and trading houses will be strong," Ando said.
Analysts expect the Nikkei index to stay between 12,300 and 12,500 in the coming week.
While the coming week will be quiet in terms of economic indicators, the market will be closely watching the countdown to the September 11 general election.
Prime Minister Junichiro Koizumi has called the election early, staking his political career to push forward his key reform of privatising the country's powerful post office.
Among major shares, Japan's largest steelmaker Nippon Steel rose 12 yen or 4.1 percent to 305 yen and its rival JFE Holdings rose 100 yen or 3.3 percent to 3,170 during the week. Mitsubishi Tokyo Financial Group surged 100,000 yen or 10.2 percent to 1.08 million.
On the downside, Toyota edged down 20 yen or 0.4 percent to 4,360 and Sony fell 50 yen or 1.3 percent to 3,680.