TOKYO: Investors in Tokyo will focus on a European Union summit next week after fears over the euro-zone debt problem were temporarily eased by the joint action of central banks, analysts said on Friday.
"Investors are monitoring the EU summit next week and the monetary policy meeting by the European Central Bank before that," said Masatoshi Sato, strategist at Mizuho Investors Securities.
Ahead of a critical week for the euro, French President Nicolas Sarkozy declared that France and Germany will push for a new European Union treaty to impose tough budgetary discipline on the debt-ravaged euro-zone.
All 27 European leaders will meet at the EU Summit in Brussels on December 8 and 9, a meeting which some observers have billed as their last chance to restore the credibility of euro-zone economic governance.
Mizuho's Sato said the time is short for European leaders to come to a resolution even after the joint action by six major central banks which moved to pump liquidity into the global financial system.
"They bought some time by taking the joint action, but they have only one week before the summit," Sato said. "I am pessimistic that they could make a decision, something they have failed to do for a long time."
Mitul Kotecha, strategist at Credit Agricole, told Dow Jones Newswires: "The central bank action has bought some time for EU leaders and the euro.
"However, patience will thin quickly and if a significant announcement is not delivered by the time of the EU summit at the latest the euro will come under pressure once again."
Nevertheless, Sato said he believed Japanese shares will be stable next week.
He said he expects the Nikkei index will be range-bound between 8,400 and 8,800, which he called "a zone where investors feel comfortable".
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