Tokyo shares may focus on monetary policy decisions

The Japanese market will turn its focus on monetary policy decisions at home and in the United States next week as well as fresh economic data, hoping for strong indicators, analysts said on Friday. Momentum is behind Japan's headline Nikkei index, which could continue to gain in the coming week, said Hirokazu Fujiki, an analyst at Okasan Securities.
A strong showing on Wall Street and a weaker yen drove Japanese shares up in the past week, and participants may push the index further toward the 11,000 level, he said.
In the week to March 12, the Tokyo Stock Exchange's benchmark Nikkei-225 added 382.30 or 3.69 percent to 10,751.26. The broader Topix index of all first-section shares gained 25.57 points or 2.80 percent to 936.38. "Market participants are expected to continue buying selective shares in firms forecasting firm recovery," he said.
In the United States the new trading week will start with Monday's release of February industrial production data followed by housing starts Tuesday and the outcome of the Federal Reserve's monetary policy meeting.
Players will also focus on any hint that Fed officials are discussing ways to exit stimulus measures, Daiwa Securities strategist Tsuyoshi Nomaguchi said in a note to clients. "It is possible that (the Fed) will change its previous suggestions about keeping the current low interest rate policy for a long time and boost the dollar," he said.
The stronger dollar helps Japanese exporters by making their products relatively cheaper. The Bank of Japan will finish its two-day policy board meeting on Wednesday, followed by the government's economic assessment, which is to be issued on Thursday.
"Players forecast the BoJ will take fresh measures to further ease monetary policy, which is likely to be seen as a positive factor for the market," Fujiki said. European Union finance ministers will discuss ways to tackle Greece's debt crisis on Tuesday.
Investor confidence should further improve if the ministers can agree on a roadmap for resolving Greece's problem, Nomaguchi said.