Jiji Press TOKYO (Jiji Press) — Tokyo stocks are expected to remain on a weak note this week due to a dearth of fresh trading incentives.
The benchmark 225-issue Nikkei average tumbled 222.59 points, or 1.13 percent, last week to close at 19,729.74 on Thursday. The Tokyo Stock Exchange was closed on Friday due to a national holiday.
The Nikkei remained at around 20,000 in the first two days of the week, its downside supported by higher U.S. equities and brisk earnings reports by major Japanese companies. But on Wednesday, stocks plunged on growing geopolitical tensions over North Korea.
The concerns over North Korea dragged down the Nikkei to its lowest closing level in over two months.
Analysts expect the Nikkei to move between 19,500 and 20,100 this week.
They agree that the impact of Wednesday’s news about heightening tensions between the United States and North Korea has mostly receded. But some said the market will lack enough strength to regain upward momentum.
Stocks are expected to “fluctuate on a bearish note,” amid the summer holiday mood, as most corporate earnings have already been released, said Hideyuki Suzuki, head of the investment market research department at SBI Securities Co.
Once last period ends, “investors may start reevaluating corporate earnings reports that came out recently” and begin active buying this week at the earliest, but probably in the week after next, he said.
Suzuki predicted the Nikkei will move between 19,500 and 20,000.
Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc., said this week will be a “lost week,” lacking the key events that market players react to.Speech