Tokyo stock market is expected to take a breather in the coming week as Japan goes into its Golden Week holiday week, a series of national holidays that will start Friday, analysts said. The market will open only on Monday and Friday next week, with many investors hanging back waiting for more corporate earnings to be released in the second week of May.
"The market is unlikely to make major moves with market participants off for holidays," said Toshihiko Matsuno, senior strategist at SMBC Friend Securities Co. The break comes after a positive week of trading on the Tokyo Stock Exchange.
In the week to April 28, the headline Nikkei index added 1.73 percent, or 167.53 points, to 9,849.74. The Topix index rose 1.15 percent, or 9.67 points, to 851.85.
With the lack of fresh trading clues in Japan, investors will be keeping their eyes on a key US employment report for April to be released on May 6. "Investors are likely to take a wait-and-see stance before the jobs report if there is nothing new to change the market's consensus forecast," Matsuno said.
The official report is expected to show that the pace of increase in US nonfarm payrolls has slowed down slightly although it will remain at a relatively strong level, Mizuho Bank said in a note to clients.
The nation's unemployment rate is seen to stay unchanged from the previous month at 8.8 percent, the bank said. Meanwhile, market participants are still trying to fully understand the exact business impact of the March 11 earthquake and tsunami.
But the full scale of the disaster's impact might not be known until mid-May, when most listed companies finish announcements of their annual earnings, brokers said. "As data have shown very weak industrial output after the disasters, sluggish earnings are expected," Matsuno said.
"But I am not too negative. If investors come to believe that the worst is soon to be over, they will turn their focus on restoration efforts and the government's measures to help prop up the Japanese economy," he added.
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