Tokyo investors will be keeping a close eye on currency trading and US holiday season shopping sales next week as the Japanese market climbed to near five-year highs. The dollar's rise has been a key catalyst for Japan share-buying as it boosts exporters' profitability.
"Speculative buying by short-term traders in both the derivative and currency markets drove last week's surge," said Mitsushige Akino, fund manager at Ichiyoshi Asset Management. "Going forward, the Nikkei will continue to be led by those speculative moves."
The Tokyo market surged close to a five-year high above the 15,600-level on Friday before fizzling on profit-taking with the Nikkei 225 index ending 0.10 percent higher at 15,381.72.
The headline Nikkei added 1.42 percent over the week.
The Topix index of all first-section shares rose 0.18 percent on Friday to finish at 1,248.57, adding 0.77 percent over the week.
Next week investors would be looking for signs of strong US holiday sales as a clue to the state of the world's largest economy.
"We believe the market's expectations will be high for the year-end shopping season in the United States," Daiwa Securities said in a note to clients. On Wall Street Thursday, the Dow closed above the key threshold of 16,000 for the first time, extending a rally that has seen the index add more than 22 percent this year. It rose 0.69 percent, to 16,009.99.
The rally followed buoyant economic data, including a drop in weekly US jobless claims and data from the Markit analysis group that showed rising US manufacturing activity in November.
Analysts also cited the Senate Banking Committee's endorsement of Janet Yellen to take over the helm at the US Federal Reserve. "The overall sentiment is increasingly 'risk-on' with Janet Yellen likely to be appointed, no Fed bond-buying tapering likely for the time being, and high expectations for the start for US Christmas sales looking solid," Tatsunori Kawai, chief strategist at Kabu.com Securities, told Dow Jones Newswires.
On Friday, shares in electronics maker Sharp jumped 8.41 percent to 322 yen on reports it is boosting production of smartphone screens for the huge Chinese market.
Mobile carrier SoftBank was up 2.25 percent at 8,150 yen after news that US hedge fund Third Point has taken a one percent stake in the firm.
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