Japanese shares seen holding steady

Japanese shares are likely to hold firm in thin trading in the coming week unless US economic data disappoint, brokers said. The Nikkei index of the Tokyo Stock Exchange gained 91.88 points, or 0.90 percent, to 10,303.83 during the past week to December 17. The Topix index of all first section shares gained 14.92 points, or 1.68 percent, to 903.14.
Tokyo shares finished the week with no clear direction as investors were trapped between fears for the eurozone and hopes for recovery. After starting the past week strongly, lifted by robustly performing Shanghai and New York bourses, Tokyo stocks moved only marginally amid a dearth of fresh cues. Investor sentiment was strong, but profit-taking capped gains.
"Traders are cautious after the market's recent gains," Takero Inaizumi, head of equities at Mizuho Investors Securities, told Dow Jones Newswires. He added, however, the Nikkei could test higher ground in the coming week as there is still room for short-covering, despite signs that the market is overbought.
The headline Nikkei index has gained 12.5 percent since November 1. "Tokyo will likely continue moving narrowly, with investors hunting companies backed by positive news and those benefiting from emerging economies," said Toshihiko Matsuno, broker at SMBC Friend Securities.
"Unless we see disappointing data (from the United States) or wild swings in currency rates, share prices are likely to hold firm," he said, adding trading could be choppy as international investors start to leave for holidays. The coming week will see an abundance of economic data and key financial events.
Players will be watching the outcome of the Bank of Japan's two-day policy board meeting on Monday and Tuesday, as the central bank is expected to keep its near-zero rate policy and to warn of continued tough economic times.
"If the bank signals its caution for the increase of the long-term bond rates, the market would increase its hope for additional easing measures," Nomura Securities said in a note to clients.
In the United States, existing home sales, durable goods orders, and new home sales, among other data, will serve as trading hints, Nomura said. The Tokyo market will close Thursday for a national holiday.