Share prices on the Tokyo Stock Exchange have begun rebounding since the key Nikkei average confirmed its second bottom at 10,030 on Nov. 12 following its fall to 9,504 on Sept. 17.
The Nikkei now appears poised to test 11,500, aiming to firm back to the March 15 low of 11,433 or the July 22 low of 11,531.
Although the rebound will be held in check by banks' unwinding of cross-held shares, purchases by foreign investors and buybacks to cover margin sales will help the market firm back.
The U.S. economy is increasingly expected to begin picking up in spring as the firmness of consumer spending has been confirmed.
Although capital spending remains weak, a series of tax cuts and credit-easing have sent retail sales rising sharply. Christmas sales are also strong. In addition, employment adjustments are forecast to peak shortly.
In Japan, the domestic economy is unlikely to pick up until the second half of 2002, and the Bank of Japan's closely watched quarterly business sentiment survey, due out Wednesday, is expected to show unfavorable findings.
Under the circumstances, buying interest is expected to focus on high-tech issues, including semiconductors and electronic parts.
While 30 stocks are planned to be listed in December, investors should pay attention to new listings with stable earnings bases as well as companies growing in new business sectors.