Volatile trading is expected to continue in the Tokyo as the stock market faces a host of uncertain factors, including the outlook for the yen, dealers said. "Trading is expected to remain rough next week as players are still nervous," said Hirokazu Fujiki, a senior analyst at Okasan Securities.
"Players also want to assess the impact of the smaller-than-expected cut in the interest rate by the Bank of Japan on the stock market," Fujiki said. The Japanese central bank lowered its super-low interest rates Friday by 20 basis points to 0.3 percent, the first cut in seven years as world central banks step up the fight against the worst financial crisis in decades.
"We have to pay special attention to foreign exchange rates next week as the yen regained following the rate decision," said Yumi Nishimura, an analyst at SMBC Daiwa Securities. "I am afraid that negative factors are likely to outnumber positive elements next week."
Tokyo financial markets will be closed on Monday for a national holiday. Trading will resume on Tuesday.
The Nikkei-225 index jumped 927.90 points or 12.13 percent to 8,576.98 points over the week, while the Topix index of all first section rose 61.01 points or 7.57 percent to 867.12.
The benchmark Nikkei fell below the key 7,000-point level at one point on Tuesday for the first time since 1982 over worries about the stronger yen, which is putting a big dent in Japanese companies' overseas earnings. Japanese shares went on a three-day winning streak through Thursday as the yen retreated and global markets clawed back, before sliding Friday.
Investors will be keeping a close watch on the US presidential election next week. "Since (Democrat Barack) Obama's victory is largely seen as certain, the focus has already been shifted to the line-up of his team," Fujiki said.
Market participants are also looking to the European Central Bank's monetary policy meeting on Thursday.
ECB president Jean-Claude Trichet has hinted at another cut in interest rates after a half point reduction to 3.75 percent in October as part of concerted action by central banks to avert a collapse of the banking system. Key economic and corporate figures to be announced next week are US jobless figures for October and interim financial results of major Japanese companies, including Toyota Motor and Japan Airlines.
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