Tokyo shares may stage a rally in the coming week if positive economic data boosts sentiment after they were depressed in the past few sessions by worries over a global slowdown, analysts said Friday. In the week to March 23, the benchmark Nikkei 225 index at the Tokyo Stock Exchange fell 1.17 percent, or 118.36 points, to 10,011.47 after finishing Monday at its highest level since last year's earthquake-tsunami disaster.
The headline index closed out 2011 at its lowest year-end level since 1982 but has since rallied almost 20.0 percent on global recovery hopes and the yen's recent fall against the dollar and euro.
The Topix index of all first-section issues ended the week at 852.53, down 1.64 percent, or 14.2 points.
Banking giant HSBC said Thursday its Purchasing Managers' Index for China had hit a four-month low, bad news compounded later in the day by PMI figures indicating the eurozone was in recession. "Although PMIs for China and Europe suggested an economic slowdown, it's too early to judge the prospects of the future economic path," said Takafumi Horiuchi, strategist at Mizuho Securities, referring to the key measures of private-sector activity.
"As to Japanese shares, prices could be supported by expectations that the Bank of Japan's Tankan survey (on April 2) will show an improvement in the leading index of large manufacturers," he said.
Industrial output figures due Thursday could also provide signs of economic recovery, he added.
A stabilisation of the yen's exchange rate at the lower end would provide hopes of a rebound for Japanese firms, Horiuchi said. A strong yen makes exporters' products more expensive overseas and erodes the value of their repatriated foreign profits.
Seiichi Suzuki, market strategist at Tokai Tokyo Securities, said he expects the Nikkei will move in a range between 9,800 and 10,300 in the coming week.