Tokyo shares are tipped to maintain their gains this week on optimism that upcoming earnings reports from major Japanese firms will illustrate a faster-than-expected recovery from the March 11 disasters.
However, risk factors such as the yen's relative strength versus major currencies will weigh as the United States continues urgent debt negotiations and markets react to the latest efforts to shore up eurozone economies.
'Stocks will move higher as Japanese firms' earnings reports will likely show an earlier-than-expected post-quake recovery,' said Kenichi Hirano, operating officer at Tachibana Securities.
'While foreign exchange moves need to be cautiously watched, the Nikkei is likely to be supported by corporate earnings,' said Hiroichi Nishi, equity general manager at SMBC Nikko Securities. 'Japanese firms' supply chains have been normalising following their disruption' caused by the March 11 earthquake and tsunami, Nishi said.
Japan posted its first trade surplus in three months in June, data showed Thursday, indicating that the world's third-largest economy is recovering from the twin disasters. The 9.0 magnitude earthquake and ensuing tsunami devastated Japan's northeast, leaving 20,000 dead or missing and causing massive production disruption, sending shipments of cars and other key export products plunging.
Source : New Age
