Tokyo shares likely to be quiet

28 Dec, 2009

Japan's stock market is likely to be quiet with many players away for the year-end holidays, analysts said Friday. Over the week to December 25, the Nikkei-225 index of the Tokyo Stock Exchange climbed 352.66 points, or 3.48 percent, to 10,494.71. The broader Topix index of all first-section shares gained 15.8 points, or 1.77 percent, to 909.39.
Trading is expected to be thin next week with few participants due to the holiday season. Japan's stock market will close early on December 30 and reopen on January 4. Stocks could extend a recent rally if US economic data impress, analysts said.
"With rising optimism over the US economic outlook, if the indicators are good the dollar may rise against the yen, which may boost Japanese shares," said Okasan Securities strategist Hirokazu Fujiki. The dollar traded above the 90-yen level this week on expectations of a rebound in global demand and an earlier-than-expected rise in US interest rates next year.
A weaker yen improves exporters' overseas profits when converted back into the local currency. "We forecast that the recovery trend of corporate earnings will remain firm and the foreign exchange market will gradually stabilise throughout 2010," Nomura Securities analysts wrote in a note to clients.

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