The Tokyo stock market faces an uncertain outlook, with eyes on Washington's assessment of US banks and news on the fate of General Motors, analysts said on Friday. Financial markets in Tokyo will be closed through Wednesday due to the "Golden Week" holiday, with trading due to resume on Thursday.
Investors are nervously looking to the results of Washington's "stress tests" to judge the health of major banks. "It's still difficult to take positions before seeing the results of stress tests," said Hirokazu Fujiki, an analyst at Okasan Securities. "But market sentiment is now picking up as individual and foreign investors are taking recent positive signs of recovery as a buying cue," Fujiki said. "If there is no surprise in the stress tests, the market is likely to maintain the positive atmosphere," he added.
Japan reported Thursday its first increase in factory output in six months, adding to hopes of an economic recovery that the central bank said should start to take root later this year. Analysts also said the market has managed to digest the news of bankruptcy procedures filed by ailing US car giant Chrysler, but there are still deep concerns about the fate of General Motors.
"GM is the real focal point, not Chrysler," said Toshikazu Horiuchi, an analyst at Cosmo Securities. "Restless sentiment toward the auto industry will continue until we can see the end of the story." Over the week to May 1, the Tokyo Stock Exchange's benchmark Nikkei-225 rose 269.38 points, or 3.09 percent, closing Friday at 8,977.37.
The broader Topix index of all first-section shares gained 16.80 points, or 2.02 percent, to 846.85. Among key economic events next week are the European Central Bank's monetary policy meeting on Thursday and US jobless figures on Friday. "Players are also closely watching corporate results by major Japanese companies to gauge how quickly they can recover from the crisis," Horiuchi said.
Toyota Motors, Fuji Heavy Industries and Bridgestone are among Japanese companies scheduled to announce their annual earnings on Friday next week.