The TOKYO Jiji Press -- Tokyo stock market sources said this week that it was expected to move on a firm note this week due to the receding uncertainties about corporate earnings and monetary policy outlooks.
Last week, the Nikkei average of 225 selected issues listed on the Tokyo Stock Exchange's Prime section gained 126.90 points, or 0.46%, to finish at 27,509. The market struggled for direction early in the week ahead of the U.S. Federal Reserve's two-day Federal Open Market Committee meeting on Wednesday.
Market sentiment was brighter in the second half of the week after Fed Chairman Jerome Powell told a press conference that disinflation has begun in the United States, a comment taken by market players to indicate a dovish turn from his past statements.
Individual issues were swayed by a string of earnings reports for periods to December 2022.
The average Nikkei is expected to move between 27,200 and 28,000 this week, analysts and brokers said.
Masayuki Otani, chief market analyst at Securities Japan Inc. said that there is less uncertainty about business outlooks with the earnings reporting season in the United States drawing to a close and the season in Japan entering its second half.
With the waning uncertainty surrounding the FOMC meeting, it is becoming easier for market players to engage in risk-on trading, according to Otani.
Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc., said that the Nikkei is unlikely to gain enough upward momentum to climb past the psychological threshold of 28,000.
There has been a lack of fresh market-moving factors to help the market test higher ground, he said.