Jiji Press TOKYO (Jiji Press) — Tokyo stocks are expected to move on a solid note this week, with the benchmark Nikkei average possibly testing 23,000, aided by expected rosy earnings reports from Japanese companies, analysts said.
Last week, the 225-issue Nikkei average advanced 285.70 points, or 1.27 percent, to pass the psychologically important line of 22,500 and end at 22,758.48, mainly thanks to purchases of issues backed by brisk corporate results.
This week, analysts expect the Nikkei average to move between 22,200 and 23,300.
“Tokyo stocks are seen staying on an upward trend next week,” an official of a bank-affiliated securities firm said last week, expecting solid business reports for the year to March 2018 by many Japanese companies, mainly on Monday and Tuesday, including drugmaker Takeda and megabank group Mitsubishi UFJ.
Many economic data announcements this week are expected to affect the Tokyo market, the official said.
They include preliminary gross domestic product data for January-March in Japan, set for release on Wednesday, and retail sales, industrial production and housing starts in the United States.
The market may attract “buying on expectations of higher corporate earnings,” Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management Co., said, noting the dollar’s recent movements above ¥109.
In earnings forecasts, many Japanese companies set their assumed dollar exchange rate for the year to March 2019 at ¥105.
Meanwhile, Yutaka Miura, senior technical analyst at Mizuho Securities Co., warned that profit-taking may hit Wall Street after recent recoveries and this may put downward pressure on Tokyo stocks.
A possible halt to the yen’s weakening to around the 110-yen level may also weigh on the market, Miura also said.