Japanese shares seen stabilising

Japanese share prices could extend a tentative rebound in the last trading week of the year amid hopes of an easing of the global credit crunch, analysts said Friday. They said bargain hunters could emerge to snap up beaten down shares but activity is likely to be muted due to the year-end holidays.
"People who had been selling are now moving to buy-back" shares after the key Nikkei index rebounded soon after slipping below the key 15,000 points level, said Daiwa Securities SMBC market analyst Kazuki Miyazawa. A lull in the yen's advance against the dollar would also be positive for Japanese exporters, helping to prop up the market, he said.
The market "is stabilising for now", Miyazawa said, adding that trading would be subdued next week, with Tokyo the market to remain closed on Monday for a public holiday and many overseas bourses due to shut for Christmas.
Over the week to December 21 the Tokyo Stock Exchange's Nikkei-225 index lost 257.51 points or 1.66 percent to 15,257.00, rebounding on Friday after falling for six of the previous seven trading days.
The broader Topix index of all first-section shares sank 32.05 points or 2.13 percent to 1,469.20. Share prices "will likely edge higher towards the year-end" due to receding concerns stemming from the US mortgage crisis, said Fumiyuki Nakanishi, market strategist at SMBC Friend Securities.
He noted that the Nikkei index's rebound had been limited to some 200 points after the index lost about 1,000 points over the six trading days to Wednesday.
"It has not recovered even half of the lost ground," suggesting the market could be set for a further rebound, he said.
Japan is to release a series of closely watched economic data next week but the market has already factored in the possibility of weak figures, Nakanishi said. "The Bank of Japan (BoJ) governor already said the economy is weak. No matter how bad the figures are, the market would not be surprised," he said.
The Bank of Japan on Thursday downgraded its overall economic assessment for the first time in three years, saying the pace of economic growth may slow due to a drop in housing investment.