Jiji Press TOKYO (Jiji Press) — Tokyo stocks are expected to remain firm, although some downside risks exist following the recent surge, analysts say.
Last week, the first trading week of 2018, the benchmark 225-issue Nikkei average skyrocketed 949.59 points, or 4.17 percent, to close at 23,714.53 on the Tokyo Stock Exchange on Friday. The Tokyo market was closed from Monday through Wednesday for the New Year holidays.
Tokyo stocks kicked off the short week with handsome gains on Thursday, when the Nikkei average shot up over 740 points to retake 23,000 for the first time in some 26 years on a closing basis.
On Friday, stocks gained further ground, backed by brisk U.S. equities.
This week, analysts expect the Nikkei average to move between 23,000 and 24,000 due to a lack of major trading incentives, including the announcements of key economic indicators.
“Although investors are expected to cash in gains, the market’s downside will be underpinned by purchases on declines,” Yutaka Miura, senior technical analyst at Mizuho Securities Co., said.
Miura indicated that the Nikkei may recover to 24,000 if the U.S. government’s jobs data for December, due out later on Friday, turns out to be strong.
Domestic players who failed to buy stocks during the recent surge are expected to purchase stocks “with delight” if the Nikkei falls below 23,000, Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co., said, suggesting that the market’s downside will be solid.
By contrast, Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., expressed concern over the market’s recent brisk advance. Stocks prices rose “at an excessively rapid pace for two days” through Friday, Fujii said.