Japanese shares are likely to be supported by bargain hunting next week although worries over the eurozone will keep investors cautious, brokers said.
"We may have seen the market's near-term bottoming out today," Mizuho Investors Securities manager Teruhisa Ishikawa said Friday.
Rather than a quick rebound of the kind seen after Dubai's debt crisis last year, the market is likely to see a more gradual uptrend over several months as it slowly prices in fundamental improvements, he told Dow Jones Newswires.
"We haven't seen a sharp, short covering-led recovery, so investors can still bargain-hunt." In the week to May 14, the Tokyo Stock Exchange's headline Nikkei index gained 97.92 points, or 0.94 percent, to 10,462.51. The broader Topix index of all first-section shares inched up 4.71 points, or 0.51 percent, to 936.45.
Kazuhiro Takahashi, equity manager at Daiwa Securities Capital Markets, said "sentiment may change (for the better) if foreign investors step up buying on the back of brighter earnings prospects by Japanese companies."
But he added risk aversion was still strong: "Investors will become less willing to take risks if speculative selling of the euro gains momentum to damage the (global) financial system." The euro hovered near 14-month lows of around 1.25 dollars in Asian trade Friday as concerns persisted about Europe's debt problems, with a trillion dollar rescue package put together by the EU and IMF failing to calm markets. Investors are watching to see if Greece can make debt repayments due next Wednesday. Greece, which became the first eurozone country to be forced to resort to the IMF for aid, needs nine billion euros to meet the debt obligation. Other market-moving events in the coming week include Japan's January-March growth figures on Thursday.
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