Tokyo shares are likely to hold steady in the coming week as investor sentiment remains good, despite profit taking on the recent rally, analysts said Friday. In the week to March 16, the benchmark Nikkei 225 index at the Tokyo Stock Exchange rose 200.09 points or 2.02 percent to 10,129.83 points, the best finish since July 22 last year.
The headline index finished 2011 at its lowest year-end level since 1982 but has since staged a rally of nearly 20 percent on global recovery hopes and recently the yen's fall against the dollar and euro. The Topix index of all first-section issues ended the week at 866.73, up 18.02 points or 2.12 percent on the preceding week.
"If we have a big positive surprise in US housing and other data, it could boost the market. Otherwise, however, Japanese stocks, as well as US stocks, will likely consolidate their recent gains," said Yumi Nishimura, senior market analyst at Daiwa Securities. "Selling to lock in profits will continue to emerge but it will not be strong enough to send the market tumbling," she said, predicting the Nikkei index will move between 10,000 and 10,200 in the coming week.
Overall sentiment remains bullish, said Nobuyuki Kashihara, executive officer of equity investment and research department at Mizuho Asset Management.
The sentiment is supported by strong fundamental factors including a brighter outlook for corporate earnings and global economic conditions, he told Dow Jones Newswires. An improvement in corporate earnings has not been fully factored-in, leaving room for more upside, he added.
Nomura Securities said the market was watching Japan's trade data for February due out Thursday, as well as other economic indicators from other countries.
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