Japanese share prices are set to extend gains this week, continuing a seemingly inexorable advance on a groundswell of optimism over the outlook for the domestic economy and company earnings, dealers said.
So far there has been no sign of an easing of upbeat investor sentiment towards the Tokyo market, which rose above 15,000 points Wednesday for the first time in almost five years and went on to close out the week above 15,400.
"Share prices are moving at a fast pace," said Masayoshi Yano, a strategist of Tokai Tokyo Securities. "Investors have strong expectations of further rises in the next year of trading."
Key factors on the horizon include the Bank of Japan's Tankan report on major companies' business sentiment due for release on December 14.
If this disappoints, the market will shift down a gear, Yano said.
A weaker yen, which helps Japanese companies selling their goods overseas, is pouring fuel on the Tokyo stock market rally, helping the Nikkei-225 index to extend its gains since the start of the year to over one third.
Masatoshi Sato, senior strategist of Mizuho Investors Securities, said investors' were betting on further rises despite caution in some quarters that the market might be rising too fast too quickly.
"Capital is flowing into the market in the face of possible overheating," he said.
Sato expects a finance ministry survey on corporate activities for the July-September quarter due out on Monday and the Tankan report the following week to offer fundamental influences to drive trading.
"Particularly the corporation statistics will affect the revision of GDP (gross domestic product)," he said.
Japan is due to update its third-quarter gross domestic product estimates on Friday.
For the week ending December 2, the Tokyo Stock Exchange's benchmark Nikkei-225 index rose 637.31 points or 4.31 percent to end at 15,421.60, the highest closing level for over five years.
The broader TOPIX index of all first-section shares won 54.05 points or 3.53 percent to 1,583.72.
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