Tokyo investors will be keeping a close eye on a Bank of Japan (BoJ) meeting next week as well as US and Chinese economic data after another week of wild trading on Japan's premier bourse. In the week to June 7, the benchmark Nikkei 225 index lost 6.51 percent, or 897.01 points, to 12,877.53, following a 5.73 percent decline the previous week.
The broader Topix index of all first-section shares fell 6.94 percent, or 78.83 points, to 1,056.95. But shares could get a boost as investors search for bargain-hunting opportunities next week with the Nikkei about 18 percent off its May peak, Nomura Securities said. Some analysts were predicting a sharp correction in the Nikkei which had surged about 80 percent in six months before the recent tumble.
Tokyo had emerged as one of the world's top-performing bourses after Prime Minister Shinzo Abe came to power in December with his pro-spending policies and prescription for aggressive central bank easing which pushed down the yen. A weaker currency makes Japanese exporters more competitive overseas and inflates overseas income which, in turn, tends to lift the Tokyo stock market.
The Nikkei slipped 0.21 percent on Friday after the greenback fell sharply on jitters over a US jobs report for May, seen as a key sign of the state of the world's biggest economy. The payrolls data is also viewed as a marker of when the US Federal Reserve may taper off its $85-billion-a-month bond-buying programme known as quantitative easing, which was aimed at boosting the world's largest economy. Investors will be watching for Chinese economic data to be released Sunday and US retail sales data later in the week, Nomura said. The Bank of Japan (BoJ) was widely expected to stand pat on any fresh monetary easing measures after announcing a huge easy-money policy in April.