Japanese shares will likely gain next week, helped by upward trends in emerging economies and the United States, dealers said Friday. "The global market sentiment has turned to risk taking" in the wake of the US Federal Reserve's decision to keep interest rates low, said Toshihiko Matsuno, research head at SMBC Friend Securities.
The Federal Reserve's policy-setting committee said Wednesday it would keep its key federal funds interest rate at "exceptionally low levels" through at least 2014, extending a prior timeframe of mid-2013.
"Share prices in emerging economies and on Wall Street have all been on the upward trend," said Matsuno. "Concern about the European debt crisis is still there, but as far as the short positioning on the euro continues, I think the optimism stays," he said.
In the week to January 27, the Nikkei 225 index at the Tokyo Stock Exchange gained 74.86 or 0.85 percent to 8,841.22, while the broader Topix index of all first-section issues rose 5.66 points or 0.75 percent to 761.13. Market players were looking to the European Union summit meeting scheduled for Monday, Matsuno said. "If the meeting breaks down over Greece, the sentiment may change its course to risk aversion," he said.
"Otherwise I think investors will try to look for positive incentives ahead of US jobs data next week," Matsuno said, adding he expects the Nikkei index to trade between 8,600 and 9,100.
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