With signs of an economic recovery nowhere in sight, the Tokyo stock market has been a roller coaster ride in recent weeks.

The market is looking for clues on whether the disposal of bad loans held by banks and the nation's structural reforms will make meaningful progress anytime soon.

After having fallen to just above the 10,000 level on Nov. 13, the 225-issue Nikkei average bounced back last week, but skepticism abounds.

Given the New York market's strong rebound in recent weeks, nonetheless, one could soon begin to envision something of a floor forming beneath the Tokyo market.

The Nikkei average now appears set to hover somewhere between 10,000 and 11,500.

Bleak earnings prospects still weigh heavily on share prices. Listed firms are now resigned to further profit falls in the months ahead.

Of all listed companies, 622 firms have so far announced earnings reports for the fiscal first half through September, showing a 45.9 percent year-on-year fall in pretax profits on a meager 0.4 percent increase in sales.

They are forecasting a 45.1 percent fall in pretax profits for the full year to March 31, on a 1.6 percent decline in sales.

Wall Street's strong showing has been a major morale booster.

The New York market has had a positive tone overall after the U.S. Federal Reserve cut key interest rates earlier this month.

Despite a 0.4 percent fall in U.S. gross domestic product in the July-September quarter, investors jumped on a buying bandwagon, taking heart from the Fed's move to funnel more money into the banking system.

The Fed slashed the target for the federal funds rate by a half point to 2 percent, the 10th cut this year.

The New York market is also beginning to count on an early end to the U.S. military campaign in Afghanistan.

Against this backdrop, the dollar rebounded strongly against the yen, providing a major lift to shares of Japanese export-oriented firms.

Once again, foreign investors' stepped-up purchases of Japanese equities are playing a major role in daily market activity. Nonresidents bought 44.5 billion yen more than they sold in the Nov. 5-9 week on top of net purchases of 9.3 billion yen the previous week.