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TOKYO (Jiji Press) — Tokyo stocks are expected to move on a weak note this week, with players refraining from active buying due to uncertainty about corporate earnings in the wake of the yen’s recent sharp upswing, market sources said.
The market may move nervously due to speculation over the Bank of Japan’s monetary policy, the sources also said.
Last week, the key Nikkei 225 stock average lost 1,123.65 points, or 3.36%, to close at 32,307.86 on Friday.
From early last week, Tokyo stocks were weighed down by the yen’s rise against the dollar reflecting a slide in U.S. interest rates. U.S. Treasury yields later regained ground, but this pulled down Wall Street, which in turn held back the Tokyo market.
Although the Nikkei staged a significant rebound on Wednesday, most of the gains were lost the following day.
On Friday, the market succumbed to heavy selling triggered by the yen’s spike blamed on growing speculation that the BOJ may lift its negative interest rate policy at an early date.
Trading was choppy this week ahead of Friday’s special quotation fixing to settle December stock index futures and options contracts.
Next week, the Nikkei is expected to move mainly between 31,500 and 33,000, analysts and brokers said.
The benchmark average is seen being top-heavy, after it has failed to surpass its year-to-date closing high of 33,753.33, marked on July 3, despite several attempts since mid-November, and instead headed south this week.
“The takeoff has failed, and the market needs to regain its footing before testing its upside again,” an official at a bank-affiliated securities firm said.
Although some issues are now reasonably priced following their slides this week amid the market’s overall weakness, investors are avoiding buying on the dip because of fluctuations of exchange rates, according to an official of a midsize securities firm.
