Greek election 'to keep pressure on Tokyo stocks'

Tokyo stocks are likely to stay under pressure in the coming week as investors await the outcome of the June 17 Greek election, analysts said Friday. In the week to June 8, the Nikkei 225 index at the Tokyo Stock Exchange gained 0.23 percent or 19.01 percent to 8,459.26. The Topix index of all first-section issues rose 1.24 percent or 8.81 points to 717.74.
At the start of the week the benchmark Nikkei hit a six-month low and the broader Topix fell to its lowest level since December 1983 on weak US and Chinese data as well as eurozone worries. Spain's finances and a possible Greek exit from the 17-nation bloc kept traders on their toes as European ministers tries to quell fears by saying they would respond "speedily" to the continent's crisis. "Share prices have already fallen a lot but (market players) won't be in a 'risk-on' mood until the Greek election next weekend," said Kenji Shiomura of Daiwa Securities.
"I expect directionless trading will continue for some time," he said, predicting the benchmark Nikkei index would move between 8,400 and 8,600 in the week head. RCM Japan chief investment officer Kazuyuki Terao told Dow Jones Newswires that "near-term selling pressure is likely to continue following recent gains."
"I would take a wait-and-see stance, ahead of Greece's election... and without potential trading cues in sight," he said. Greece goes to the polls for the second time in six weeks on June 17 after an inconclusive vote in May saw parties supporting the EU-IMF debt accord take a drubbing from voters hostile to endless austerity and higher taxes.
China on Thursday cut interest rates for the first time since 2008 ahead of the release of inflation, industrial production and retail sales data on Saturday, and of trade data Sunday.
Shiomura of Daiwa said investors had already braced themselves for poor readings, arguing China had taken action in anticipation of that. "The market is already aware of its slowing economy and the focus is on what measures China is taking. Weak figures themselves wouldn't be a fresh selling factor," he said.
Events and data due out next week include US retail sales and industrial production as well as a policy meeting of the Bank of Japan.