Japanese shares are seen to be rangebound next week as investors focus on US and Chinese economic data, while any downside is likely to be limited by bargain hunting, brokers said. "Stocks are likely to move in a tight range next week with investors' eyes on economic data as well as the foreign exchange market," said Hiroichi Nishi, equity general manager at SMBC Nikko Securities.
"Their downside will be underpinned by bargain hunting as Japanese shares are still cheaply valued," Nishi said. Tsuyoshi Segawa, equity strategist at Mizuho Securities, said: "There are not yet factors to drive up stocks to break through recent ranges. "Uncertainties over the course of the Chinese and US economies are weighing on the market".
In the week to June 10, the benchmark Nikkei index at the Tokyo Stock Exchange added 0.23 percent, or 22.23 points, to 9,514.44. The Topix index of all first section shares gained 0.10 percent, or 0.81 points, to 817.38.
Weaker-than-expected US nonfarm payrolls data for May reinforced the view that recovery is slowing in the world's largest economy, sending stocks lower and triggering dollar selling against the yen earlier this week. A string of major US economic data will be released next week, including retail sales on Tuesday and the consumer price index on Wednesday. In China, CPI and other economic indicators are due out on Tuesday.
"Chinese CPI will be on focus in order to predict the nation's future monetary policy amid growing concern that its rate hikes may have cooled its economy too much," Segawa said. The Bank of Japan is scheduled to hold a two-day policy meeting from Monday. "The central bank is widely expected to stand pat on its monetary policy," Nomura Securities said in a note to clients.
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