Japanese shares may strike fresh five-month highs next week if the dollar continues its recovery against the yen, brightening the outlook for exporters here, dealers said on Friday. But the market outlook will be heavily influenced by how Wall Street reacts to key US jobs data that was due out later Friday, they added.
"If the payrolls data is within market expectations investors will be relieved that the worst period for the US economy is over," said Yuya Tsuchida, a market strategist at Toyo Securities. Oil prices may also start to stabilise, "which will encourage global capital flows from oil into equities," he said.
In the coming week, the Nikkei-225 is likely to move in a range of 14,000-14,800 points, said Tsuchida. Over the week to June 6, the Nikkei-225 index rose 150.90 points or 1.05 percent to 14,489.44 on the Tokyo Stock Exchange, the best finish since January 9.
The broader Topix index of all first section shares gained 19.97 points or 1.42 percent to 1,428.11. Hideo Mizutani, chief strategist at Sieg Securities, thinks the Nikkei could rise to about 15,000 points next week.
"The cheaper yen against the dollar and the euro," he said, "is encouraging investors to buy Japanese stocks." The yen was weighed down Friday by speculation that interest rates could rise in the United States and the eurozone later this year, analysts said.
Dealers will be closely monitoring Japanese economic indicators due out next week, including machinery orders due Tuesday and revised first-quarter economic growth on Wednesday, analysts said. Economic growth is expected to be revised up to 0.9 percent quarter-on-quarter, from a previous estimate of 0.8 percent, due to better than expected corporate capital expenditure, Calyon economist Susumu Kato predicted. He expects core machinery orders to rise 5.0 percent in April from the previous month, ahead of consensus market forecasts.
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