Jiji Press TOKYO (Jiji Press) —Tokyo stocks are expected to continue facing high volatility this week, with investors keeping a close tab on movements in U.S. stock prices.
Last week, the benchmark 225-issue Nikkei average tumbled 1,891.91 points, or 8.13 percent, to 21,382.62.
On Tuesday, the Tokyo market came under heavy selling pressure, with the Nikkei average briefly losing more than 1,600 points before ending down 1,071 points. The sharp fall came after growing worries over higher U.S. long-term interest rates pushed down the Dow Jones industrial average by 1,175.21 points, its worst single-day point loss in history, the previous day.
The market was hit by heavy selling also on Friday, hurt by the Dow’s tumble of 1,032.89 points, the second-biggest single-day point loss on record, on Thursday.
This week, analysts expect the Nikkei average to move between 20,000 and 22,500.
“It’s about time Tokyo stocks rebounded” sharply, said Hideyuki Suzuki, head of the investment market research department at SBI Securities Co.
Suzuki predicted that Tokyo stocks will gain upward momentum from the U.S. market’s expected stability. U.S. long-term interest rates are unlikely to rise further, he indicated.
Hefty buybacks are expected after the market’s sharp falls, brokers said.
By contrast, Yutaka Miura, senior technical analyst at Mizuho Securities Co., took a bearish stance. Miura suggested that the Nikkei could easily fall by some 1,000 points in one day amid high volatility.
Purchases of stocks seen as undervalued despite brisk corporate earnings probably won’t be able to offset selling triggered by expected falls in U.S. stocks if the Dow gives up over 1,000 points again, Miura warned.Speech