Tokyo stocks are expected to show more stability in the coming week but investors will remain cautious over the eurozone sovereign debt crisis, with upcoming data releases also in focus, dealers said.
Regional shares ended the week on a more positive note with sentiment boosted by European Central Bank plans to protect eurozone lenders from the crisis, but analysts warned the rally would not last long. "Tokyo stocks are unlikely to fall sharply but their topside will be limited," said Masatoshi Sato, senior strategist at Mizuho Investors Securities.
Friday's US jobs data will help determine how the market begins the coming week as investors look for further indications of the health of the world's largest economy. Investors will also keep an eye on Chinese inflation data due October 14. Tokyo markets are closed Monday for a holiday. Trade will resume Tuesday.
In the week to October 7, the benchmark Nikkei 225 index at the Tokyo Stock Exchange fell 94.67 points or 1.09 percent to 8,605.62. The Topix index of all first-section issues lost 19.62 points or 2.58 percent to 741.55.
The week began with pessimism after Greece said its budget deficit should come to 8.5 percent of GDP in 2011, short of an initial 7.4-percent target set in June, raising fears it would fail to qualify for a much-needed tranche of bailout cash. However, concerns that the eurozone's problems would cripple global financial systems were eased by the European Central Bank's measures to provide cash-strapped banks with liquidity, unveiled Thursday. The bank opened two longer-term new lines of credit for banks and pledged to buy up to 40 billion euros of bank bonds as it looked to soothe jittery financial markets.
"The market has calmed down but the ECB's measures have not fundamentally resolved the problem," said Toshihiko Matsuno, senior strategist at SMBC Friend Securities Co.
The Group of 20 finance chiefs will hold a closely watched meeting from Friday.
The market is focusing on whether all 17 eurozone countries will approve by then new powers drafted in July for the 440-billion-euro ($590 billion) bailout fund of the European Financial Stability Facility, analysts said.
Releases of US firms' earnings reports will also compete for investors' attention, Matsuno said.
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