Tokyo investors will be looking to the Bank of Japan’s policy meeting next week for signs of further stimulus measures, a year after policymakers unleashed an unprecedented easing campaign to stoke the economy.
Brokers said investor sentiment was upbeat but many were keeping to the sidelines ahead of the release of key US jobs data later on Friday.
“We can’t predict the situation for the Tokyo stock market next week before seeing results of (US) March payroll figures. But I would say the current positive sentiment is expected to continue for now,” said Shunichi Umeda, a broker at Tokai Tokyo Securities.
Investors and analysts are widely expecting the Bank of Japan (BoJ) to maintain its current monetary easing policy when its policymakers meet on Monday and Tuesday.
But investors are waiting to see if BoJ chief Haruhiko Kuroda gives signs of future easing as policymakers watch the impact of Japan’s first sales tax rise in 17 years, which came into effect on Tuesday.
“Attention will be paid to the Bank of Japan’s monetary policy meeting next week as market expectations of fresh measures are growing,” Umeda said.
On Friday, the Nikkei-225 index edged down 0.05 per cent, or 8.11 points, to 15,063.77, while it rose 2.50 per cent over the week.
The broader Topix index of all first-section shares slipped 0.07 per cent, or 0.88 points, to 1,215.89. It also rose over the week, tacking on about 2.50 per cent.
The Friday jobs report was expected to give a clearer idea about the US recovery than recent readings, which were skewed by severe winter weather at the turn of the year.
While a strong figure will be welcomed, there are fears that too-good numbers could prompt the Federal Reserve to speed up tapering of its stimulus regime.
Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, said: “Solid jobs data is welcome but numbers too robust may spark fears that the Fed may actually accelerate stimulus tapering.”
That could result in “another roiling effect”, he said.
The US Federal Reserve’s decision to start winding down its stimulus program and fears of capital flight triggered sell-offs in emerging markets earlier this year.
On forex markets the US dollar bought Y103.87, against Y103.94 in New York on Thursday.
In stocks trading, Sony rose 0.15 per cent to Y1,994, Toyota fell 0.82 per cent to Y5,792 and Nissan rose 0.85 per cent to Y947.