Tokyo - Tokyo investors are eyeing a rosy future, with a reconfigured pension fund investment, more central bank easing and a possible extra government budget to safeguard the fragile recovery, analysts said Friday.
In the coming week, the Tokyo market will digest Japan's unemployment data and the key Tankan business confidence survey, as well as US data on jobs, trade and manufacturing sector sentiment.
The dollar's sustained strength against the yen could also provide support for the Tokyo market.
“Japanese macroeconomic data as a whole should lift hopes for continued economic recovery and cheer the market,” Daiwa Securities said in a report to clients.
On Friday, Tokyo stocks slipped 0.88 percent following a sell-off on Wall Street, easing from a seven-year high reached in the previous session.
The key Nikkei 225 index at the Tokyo Stock Exchange fell 144.28 points to 16,229.86.
The index lost 0.55 percent over the four-day trading week, shortened by a national holiday on Tuesday.
The Topix index of all first-section shares eased Friday 1.08 percent, or 14.48 points, to 1,331.95.
It made essentially no weekly change, edging up only 0.04 points.
“Japan is never immune to global equity sentiment which, at least for the moment, has taken an abrupt turn for the worse,” said Naoki Fujiwara, fund manager at Shinkin Asset Management.
“The dollar remains relatively strong, however, and expectations for more government pension fund exposure to domestic equities are keeping hopes high for more stock buying,” he told Dow Jones Newswires.
Daiwa Securities echoed the view and added that hopes for more easing by the Bank of Japan and a possible extra government budget to safeguard fragile recovery were also lifting the investor spirit.
Tokyo shares have generally enjoyed solid support from hopes that Japan's $1.2 trillion (R13.5 trillion) public pension reserve fund would increase its allocation to domestic stocks.
But investors are having to read tea leaves as the government for now moves cautiously to reform the Government Pension Investment Fund, which manages reserves for Japan's universal public pension and for private sector employees and invests in listed financial assets such as stocks and bonds.
In Tokyo share trading on Friday, Honda Motor dropped 1.88 percent to 3,744.5, while Toyota slipped 1.48 percent to 6,453.0.
Mobile carrier SoftBank fell 0.76 percent to 7,900.0 and Mitsubishi UFJ Financial Group shed 2.28 percent to 625.2.
The greenback stood at 109.02 yen in Friday Asian trade, up from 108.73 yen in New York on Thursday.
The euro bought $1.2742 and 138.91 yen against $1.2750 and 138.62 yen in Thursday US trade. - Sapa-AFP