Japanese share prices are likely to move in a narrow range but investors are generally optimistic that the country's recession has bottomed out, analysts said on Friday. With the corporate earnings season drawing to a close, investors are expected to turn their focus to economic indicators, including second-quarter gross domestic product figures due on Wednesday, dealers said.
Share prices are "likely to move narrowly," Nikko Cordial broker Hiroichi Nishi said, adding the market would have a solid bottom unless Japan's economic growth data, due out Wednesday, provide a big surprise.
Analysts think the world's second largest economy contracted at an annualised pace of about 15-16 percent in the three months to March, which would be its worst performance since World War II. "Weak data have been factored in although a sharply better or worse than expected figure could sway the market," Nishi said.
Over the week to May 15, the Nikkei-225 fell 167.81 points, or 1.78 percent, to 9,265.02. The broader Topix index of all first-section shares dropped 13.7 points, or 1.53 percent, to 881.65. Hiroaki Hiwata, strategist at Toyo Securities, said the Nikkei is likely to move in a range of 9,000-9,600 points next week.
"The corporate earnings season is mostly over and there is a bit of hope for an economic recovery," Hiwata said. "If the dollar-yen exchange rate remains stable or the dollar gains further, investors could resume buying stocks," he said. But Kazuhiro Takahashi, equity information chief at Daiwa Securities SMBC, said the index may slip close to, or below, 9,000 points.