Tokyo traders will be watching key US jobs data and a G7 meeting later Friday but share prices may bottom out next week on inflows of capital from other markets, analysts said. Key US jobs data for September will provide a clue to the state of the world's biggest economy, which is struggling to recover from its worst recession in decades.
Talks in Washington on Friday among finance ministers and central bankers of the Group of Seven (G7) economic powers are expected to include how to avoid beggar-thy-neighbour forex policies that could wreck the global economy.
However, Hiroaki Hiwata, strategist at Toyo Securities said: "Even if the jobs data turns out to be negative, it could arouse more expectations of additional monetary easing by the US (Federal Reserve), which is not necessarily bad for stocks markets."
In the week to October 8, the headline Nikkei index gained 184.65 points, or 1.96 percent, to 9,588.88. The Topix index of all first section shares of the Tokyo Stock Exchange advanced 9.47 points, or 1.14 percent, to 839.44.
Hiwata said investors appear to have digested the impact of a strong yen on Japanese exporters while "redundant capital which investors have earned in robust commodity markets could flow into stocks markets next week."
"Stock markets reacted the sharpest to a strong yen at the end of August and early September, but since then share prices have not fallen further despite the recent strength of the yen," he said. He expects the Nikkei index will move in a range between 9,400 and 10,000 next week.