Japanese shares set to rise after Greek polls

18 Jun, 2012

Japanese shares may rise again next week after Greek elections at the weekend, which will offer more clarity about the debt-hit nation's future in the embattled eurozone, analysts said Friday.
In the week to June 15, the Nikkei 225 index at the Tokyo Stock Exchange gained 1.3 percent, or 110.06 points, to 8,569.32, while the broader Topix index of all first-section shares rose 1.23 percent, or 8.83 points, to 726.57.
Markets have been on edge for weeks ahead of the Sunday polls amid fears that anti-austerity parties opposed to an international bailout may prevail, setting in motion a debt default and Greece's exit from the 17-nation eurozone.
Seiichi Suzuki, strategist at Tokai Tokyo Securities, said the Tokyo market has been overly sensitive - and pessimistic - about the debt crisis in Europe, which is a major market for Japanese goods. "The Greek election has been one of the most closely monitored issues in the past few months, but actually for many investors in the Tokyo market watching it finish will be the biggest event of all," he said.
"For as much risk-aversion as there has been in the market, I think there is a possibility that share prices will move upward," he said.
Deepening eurozone fears, Spain last weekend became the fourth country to receive rescue funds - following bailouts of Greece, Ireland and Portugal - after its European partners agreed to a 100-billion-euro ($125 billion) lifeline for its troubled banking sector. Markets were also looking to a crucial summit of the Group of 20 leading economies in Mexico next week, as well as possible fresh stimulus measures from the US Federal Reserve.
Tachibana Securities operating officer Kenichi Hirano said short-term buying will likely dominate the Tokyo market next week, with the benchmark Nikkei index likely to trade in a range of 8,300 to 8,800.

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