Nikkei set to rise but volume may stay depressed

TOKYO: The Nikkei average looks set to trade at the top of its well-trodden post-quake range on Wednesday after Wall Street rallied on easing worries over Greece, although uncertainty about a long-term solution may keep volume low.

The benchmark index will likely open well above the top of the Ichimoku cloud and resistance is seen around 9,751 -- an intraday high marked on May 13.

"If the Nikkei can pierce above that and close near its 200-day moving average at 9,855 it will be a strong signal that the bulls have stepped into the market quite aggressively," said Takashi Hiroki, chief strategist at Monex Securities.

"But I think everyone will be cautious ahead of votes in Greece later this week, so any gains will likely be made on relatively thin volume," said Hiroki.

Greece's parliament will vote Wednesday and Thursday on a package of spending cuts, tax hikes and privatisations required by international lenders as a condition for further aid.

A survey by the Nikkei daily showing retailers predict stronger results for the June-August will likely keep the sector in focus after having posted strong gains for the last two sessions.

Nikkei futures in Chicago ended at 9,785 up from their Osaka close of 9,650.

The benchmark Nikkei rose 0.7 percent to 9,648.98, on Tuesday. The broader Topix index gained 0.6 percent to 830.34.

Copyright Reuters, 2011