AFP, Tokyo :
Japanese equity traders will be guided next week by another batch of Chinese indicators after a recent run of poor data fanned global volatility, while the US Federal Reserve’s interest rate decision Thursday will also be in focus.
Uncertainty over the Fed’s next move has exacerbated jitters among investors as fears over China’s economic outlook have seen global markets swing wildly.
But volatile share prices and concerns about China and other emerging markets are seen as factors that may discourage the Fed from taking action.
Daiwa Securities said on Friday it was betting that the Fed would keep its current ultra easy monetary policy to help prop up markets.
However, upcoming Chinese August data, including on industrial production and retail sales, also will affect investor sentiment, the brokerage said.
“If the Chinese data for August shows improvement, it could dampen fears over the Chinese economy,” Daiwa said.
But if the figures weaken the prospect Beijing will increase spending to support the economy “it could encourage selling in the Shanghai market, as well as the Japanese and US markets”, Daiwa added.
In the past week, the headline Nikkei 225 index gained 2.65 percent to 18,264.22.
Tokyo’s benchmark index ended slightly lower Friday, after a roller-coaster week that saw wild swings across global markets, including a 7.7 percent surge on the Nikkei Wednesday, followed by a 2.5 percent fall the next day.
Meanwhile, the broader Topix index of all first section shares rose 2.47 percent on the week to 1,480.23.
A series of measures over the past few days out of Beijing have settled nerves as China’s leaders gave reassurances they had control of the crisis, which has wiped trillions off global markets in recent weeks.
“The root cause of this kind of correction is the timing of the US rate hike and its impact on the Chinese economy,” said Tomohiro Okawa, an equity strategist at UBS Group in Tokyo.
Okawa told AFP that risk sentiment has slightly improved compared to earlier this month, but he thinks the volatile markets will continue in the medium term.
But the impact of a possible rate hike “is weaker than previous US rate hikes, because the pace of the rise is very slow compared with previous hikes,” said Okawa.
Buying was helped by healthy gains on Wall Street Thursday, where investors are hoping the central bank will hold fire on lifting rates.
In Japanese share trading market heavyweight Fast Retailing, operator of the Uniqlo clothing chain, gained 1.48 percent to 47,620 yen, while Toyota fell 1.43 percent to 7,072 yen, and telecom giant Softbank was down 0.64 percent to 6,513 yen.
The dollar rose to 120.69 yen in Tokyo from 120.63 yen Thursday in New York, while the euro was at 136.18 yen against 136.01 yen.
Japanese equity traders will be guided next week by another batch of Chinese indicators after a recent run of poor data fanned global volatility, while the US Federal Reserve’s interest rate decision Thursday will also be in focus.
Uncertainty over the Fed’s next move has exacerbated jitters among investors as fears over China’s economic outlook have seen global markets swing wildly.
But volatile share prices and concerns about China and other emerging markets are seen as factors that may discourage the Fed from taking action.
Daiwa Securities said on Friday it was betting that the Fed would keep its current ultra easy monetary policy to help prop up markets.
However, upcoming Chinese August data, including on industrial production and retail sales, also will affect investor sentiment, the brokerage said.
“If the Chinese data for August shows improvement, it could dampen fears over the Chinese economy,” Daiwa said.
But if the figures weaken the prospect Beijing will increase spending to support the economy “it could encourage selling in the Shanghai market, as well as the Japanese and US markets”, Daiwa added.
In the past week, the headline Nikkei 225 index gained 2.65 percent to 18,264.22.
Tokyo’s benchmark index ended slightly lower Friday, after a roller-coaster week that saw wild swings across global markets, including a 7.7 percent surge on the Nikkei Wednesday, followed by a 2.5 percent fall the next day.
Meanwhile, the broader Topix index of all first section shares rose 2.47 percent on the week to 1,480.23.
A series of measures over the past few days out of Beijing have settled nerves as China’s leaders gave reassurances they had control of the crisis, which has wiped trillions off global markets in recent weeks.
“The root cause of this kind of correction is the timing of the US rate hike and its impact on the Chinese economy,” said Tomohiro Okawa, an equity strategist at UBS Group in Tokyo.
Okawa told AFP that risk sentiment has slightly improved compared to earlier this month, but he thinks the volatile markets will continue in the medium term.
But the impact of a possible rate hike “is weaker than previous US rate hikes, because the pace of the rise is very slow compared with previous hikes,” said Okawa.
Buying was helped by healthy gains on Wall Street Thursday, where investors are hoping the central bank will hold fire on lifting rates.
In Japanese share trading market heavyweight Fast Retailing, operator of the Uniqlo clothing chain, gained 1.48 percent to 47,620 yen, while Toyota fell 1.43 percent to 7,072 yen, and telecom giant Softbank was down 0.64 percent to 6,513 yen.
The dollar rose to 120.69 yen in Tokyo from 120.63 yen Thursday in New York, while the euro was at 136.18 yen against 136.01 yen.
