Tokyo stocks will be constrained in the coming week as cautious investors look to avoid risk ahead of key US jobs data, while Europe's protracted efforts to address its debt crisis continue.
The Nikkei index will enter a new quarter having ended the highly volatile and fear-driven July-September period down 11.4 percent. "Economic indicators, the situation in Europe and foreign exchange moves will be key" for the market's direction, said Hiroichi Nishi, equity general manager at SMBC Nikko Securities.
Shinkin Asset Management fund manager Naoki Fujiwara told Dow Jones Newswires: "The market is likely to remain tentative ahead of next week's BoJ Tankan survey and US jobs data."
The Bank of Japan will release its Tankan survey of business sentiment on Monday and a key US employment report is due out on Friday.
"Investors will remain jittery over the situation in Europe. If the situation stabilises, the Tokyo market is likely to show steady performance," Hirano said.
"Tokyo stocks are showing some signs of bottoming out but unlikely to post solid gains," he added.
In the week to September 30, the benchmark Nikkei 225 index at the Tokyo Stock Exchange rose 140.03 points or 1.64 percent to 8,700.29. The Topix index of all first-section issues gained 16.63 points or 2.23 percent to 761.17.
Germany's approval Thursday of a plan to expand a crucial eurozone rescue fund boosted hopes that it would pass in all 17 eurozone states. Despite the hurdle being cleared, uncertainty lingers as markets wait to see whether Greece's austerity measures will satisfy its auditors and enable the next tranche of crucial bailout funds to be released. The market is also closely watching whether the European Central Bank will decide on any steps to tackle the crisis at its policy meeting on Thursday.
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