The Tokyo stock market has been in a wait-and-see mode since the beginning of the fiscal year.

Although many are agreed that signs of economic recovery are in sight in Japan, this sort of economic news has already been factored into share prices, and investors remain wary of making big moves.

The results of special bank inspections announced by the Financial Services Agency on Friday have had little impact.

Investors have been unnerved by the recent raft of domestic political scandals and rising oil prices on the world market. Also worrying is the escalating Israeli military campaign on the West Bank.

Despite a number of downside factors, however, public pension funds’ increased purchases of equities — or speculation about them — are helping underpin the market.

Investors are now torn between hunting for bargains and waiting for the dust to settle on speculation over corporate earnings.

With both domestic and foreign institutional investors remaining on the sidelines, active market players are now confined largely to brokerage dealers and day traders who are seeking quick returns by placing buy and sell orders within the same day.

Still, bull markets always appear suddenly.

The market is awaiting reports on the U.S. gross domestic product for the January-March quarter amid expectations U.S. economic growth is now comparable to its pace in 1999 and 2000.

Once it becomes evident that a rapid U.S. economic recovery is unfolding, buyers will move in.

Technology shares, which had long been neglected by investors, will then come into vogue again.

High-tech companies will no doubt benefit immensely from an economic recovery in the U.S., the hub of global information and technology developments, and a pickup in demand for defense-related applications.

Should the U.S. economy fail to recover as fast as expected, however, such a bullish scenario will not materialize.

The market is looking for clues about whether the U.S. Federal Reserve will tighten its grip on credit amid worries about heightened Mideast tensions and rising crude oil prices.

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