Tokyo, Sept. 19 (Jiji Press)–Tokyo stocks are expected to retain their strength next week amid growing optimism about Japan’s economic fundamentals and corporate earnings.

“The market’s uptrend will remain unchanged while there is the possibility that profit taking will gain the upper hand at some point amid caution about the key Nikkei average’s rapid rally,” said Yutaka Miura, equity manager at Shinko Securities Co. The key market gauge has jumped more than 43 pct from a 20-year low marked in late April.

Miura expects the Nikkei average to move between 10,600 and 11,300 next week.

This week, the 225-issue index surged 225.61 points, or 2.1 pct, to end at 10,938.42 on the Tokyo Stock Exchange Friday. On Thursday, it closed above 11,000 for the first time since June 13, 2002, aided by active investor appetite, notably for bank and tech issues.

Funds from foreign investors, the biggest driver behind the Nikkei’s pickup, are seen to keep flowing into the Japanese market.

Kenichi Hirano, equity general manager at Tachibana Securities Co., said that the Japanese stock market has become a main playing field for global hedge funds.

While many new hedge funds are being created, existing ones have yet to enjoy fully the fruit of the Nikkei’s rally, Hirano explained.

The market may take a cue from a cabinet reshuffle, seen for Monday, following the ruling Liberal Democratic Party’s presidential election Saturday, in which Prime Minister Junichiro Koizumi is widely expected to beat three other contenders.

Shinko’s Miura takes the view that if Koizumi picks those supporting his structural reform agenda for the reshuffled cabinet, that would be neutral to the market.

But he said that investors will be disappointed if the new cabinet lineup proves a compromise with antireform forces.

Market players are concerned about the yen’s appreciation, which may put a damper on mainstay export-oriented issues. They are closely watching the yen’s movements while keeping tabs on a meeting of finance ministers and central bank chiefs from the Group of Seven major industrial nations to be held in Dubai on Saturday, market sources said.

Tokyo, Sept. 19 (Jiji Press)–Tokyo stocks are expected to retain their strength next week amid growing optimism about Japan’s economic fundamentals and corporate earnings.

“The market’s uptrend will remain unchanged while there is the possibility that profit taking will gain the upper hand at some point amid caution about the key Nikkei average’s rapid rally,” said Yutaka Miura, equity manager at Shinko Securities Co. The key market gauge has jumped more than 43 pct from a 20-year low marked in late April.

Miura expects the Nikkei average to move between 10,600 and 11,300 next week.

This week, the 225-issue index surged 225.61 points, or 2.1 pct, to end at 10,938.42 on the Tokyo Stock Exchange Friday. On Thursday, it closed above 11,000 for the first time since June 13, 2002, aided by active investor appetite, notably for bank and tech issues.

Funds from foreign investors, the biggest driver behind the Nikkei’s pickup, are seen to keep flowing into the Japanese market.

Kenichi Hirano, equity general manager at Tachibana Securities Co., said that the Japanese stock market has become a main playing field for global hedge funds.

While many new hedge funds are being created, existing ones have yet to enjoy fully the fruit of the Nikkei’s rally, Hirano explained.

The market may take a cue from a cabinet reshuffle, seen for Monday, following the ruling Liberal Democratic Party’s presidential election Saturday, in which Prime Minister Junichiro Koizumi is widely expected to beat three other contenders.

Shinko’s Miura takes the view that if Koizumi picks those supporting his structural reform agenda for the reshuffled cabinet, that would be neutral to the market.

But he said that investors will be disappointed if the new cabinet lineup proves a compromise with antireform forces.

Market players are concerned about the yen’s appreciation, which may put a damper on mainstay export-oriented issues. They are closely watching the yen’s movements while keeping tabs on a meeting of finance ministers and central bank chiefs from the Group of Seven major industrial nations to be held in Dubai on Saturday, market sources said.