Japanese share prices are well placed to extend recent gains next week if the Bank of Japan's key Tankan business survey, due out Monday, meets upbeat expectations, dealers said Friday.
For the week to June 30, the Tokyo Stock Exchange's benchmark Nikkei-225 index rose 381.14 points or 2.52 percent to 15,505.18, the highest level since June 5. That weekly gain was accounted for by a 2.54 percent jump Friday after the US Federal Reserve hiked rates as expected but changed the wording of its policy statement to suggest it will take a softer line on further increases.
The broader TOPIX index of all first-section shares gained 41.39 points or 2.68 percent to 1,586.96.
With the Federal Reserve's interest rate decision out of the way, attention turns to Monday's quarterly Tankan survey which is expected to be key to when Japan's central bank scraps its zero interest rates.
"Japanese stocks are expect to move higher as market forecasts are for the Tankan to show an improvement in sentiment among both large manufacturers and non-manufacturers," said Fumiaki Nakanishi, head of market research at SMBC Friends Securities.
Ryuta Otsuka, strategist at Toyo Securities, also said that the market reaction to the Tankan would probably be positive as the survey is expected to show solid capital investment plans.
"Our view remains that the BoJ will scrap its zero-interest rate policy at the July meeting," Otsuka said. "Japan's stock markets are also considered to be buoyed by the improvement in the balance of supply and demand," said Nakanishi of SMBC Friends.
He said that the investment environment was improving with the Fed decision out of the way and foreign investors are now expected to be a positive influence while local individuals may spend their bonuses on stocks.
Both Otsuka and Nakanishi said that the Nikkei-225 index will head toward the 16,000 points level next week but may first see-saw back down to 15,000 points in volatile trading while the overall trend now appears positive.
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