Japanese shares to rise on weaker yen, Europe hopes
Japanese shares may rise again next week on the back of a weakening yen and hopes that a key EU summit will see further progress on Europe's financial crisis, analysts said Friday. In the week to June 22, the Nikkei 225 index at the Tokyo Stock Exchange gained 2.67 percent, or 229.03 points, to 8,798.35.
Copyright Agence France-Presse, 2012
The broader Topix index of all first-section shares rose 3.3 percent, or 24.35 points, to 750.92. "The Nikkei's performance is firming," said Takashi Hiroki, chief strategist at Monex Inc. The outlook for next week is generally positive as markets look for a solid plan to finance indebted European countries, he added.
Hiroaki Hiwata, strategist at Toyo Securities, said Japanese stocks would also win support if the yen continues to weaken against the dollar. "If the currency market remains stable, investors will focus on each company's performances rather than fears on the global economy, which could boost the Nikkei index up to the 9,000 level," he said.
Japanese exporters suffer when the yen is strong because it makes their products pricier overseas while shrinking their foreign-earned income.
The leaders of Germany, France, Italy and Spain are due to meet in Rome later Friday to thrash out details of measures aimed at tackling Europe's debt crisis, before the crucial EU summit next week. The International Monetary Fund on Thursday said the eurozone needs to establish a full banking union and that the European Central Bank should usher in further stimulus, warning the region's crisis was at a "critical stage".