Investors to keep eye on data, central bank meeting this week

Tokyo investors will be looking to a raft of data in the coming week after the market rebounded Friday because of bargain hunting and last-minute buying before the end of the Japanese fiscal year.

The benchmark Nikkei 225 index gained 0.50%, or 73.14 points, to finish at 14,696.03 on Friday. The Topix index of all first-section shares rose 0.82%, or 9.62 points, to 1,186.52, posting a weekly gain of 3.54%.

Investors will be looking at Japanese industrial production on Monday, the Bank of Japan's closely watched Tankan business confidence survey Tuesday, a European Central Bank policy meeting on Thursday and U.S. jobless data at the end of the week.

"Investors will be closely watching a string of events and economic indicators but overall there are expectations that the market will go higher with the start of April," said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.

"I expect the market to continue to be solid next week, with the Nikkei likely to trade in a 14,500-15,000 range."

April marks the start of a new fiscal year in Japan, which means "fund managers build fresh positions and should contribute to making the mood brighter", Nishi added.

The Nikkei is down about 10% since the start of the year, after the headline index surged 57% in 2013 to its best annual run in more than four decades.

Concerns about simmering tensions in the Ukraine crisis, a Chinese economic slowdown and worries that an April 1 tax rise will dent Japanese consumer demand may hang over the market.

But improving U.S. economic data could help offset negative factors, Nishi said.

"There are uncertainties such as developments over Russia-Ukraine tensions and signs of a slowdown in the Chinese economy, but these are not fresh market movers," he said.

Daiwa Securities chief technical analyst Eiji Kinouchi told Dow Jones Newswires that the likelihood of strong investor sentiment going forward "will depend on whether long-term investors see signs of a break out of deflation and decide to re-weight their portfolios".

Government data Friday showed Japanese inflation in February at 1.3%, matching forecasts from the Bank of Japan which targeted a 2% rate by next year as part of its bid to end years of falling prices which hampered growth.

© (c) 2014 AFP