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The benchmark 225-issue Nikkei average has been languishing at around 11,000 since the beginning of the fiscal year, reflecting a lack of clear direction.

The Tokyo stock market is locked in a crosscurrent between expectations of a growing flow of money from pension funds and fears of further falls in New York stock prices.

Yet, many anticipate that the market will soon rebound strongly on a string of favorable earnings reports.

If anything, one could envisage something of a floor forming beneath the market.

The biggest morale booster of late has been upbeat U.S. economic news. After contracting at a 1.3 percent annual rate in the July-September term, the U.S. economy expanded by 1.7 percent in the October-December period.

The U.S. economy is now thought to have expanded at a rate of more than 5 percent in the first quarter of this year.

Wall Street is now in this quarter’s peak earning week. With worries fading about fraudulent corporate accounting practices, the New York market is beginning to count on favorable earnings projections for the April-June period, a quarter after the strong U.S. economic pickup.

An economic recovery in Japan, however, may not become discernible until a quarter after listed firms as a whole log increased profits.

Leading high-tech companies Sony, NEC and Sharp will announce their earnings reports for fiscal 2001 on April 25, and Hitachi, Matsushita Electric Industrial and Mitsubishi Electric will do likewise the following day.

After being unnerved by a series of downward revisions of earnings for fiscal 2001, the market is now banking on successful restructuring plans and favorable earnings forecasts for the year ahead.

Elated at brightened prospects for exports and steady progress in inventory adjustments, investors are becoming increasingly susceptible to positive corporate news.

In its quarterly “tankan” survey announced early this month, the Bank of Japan predicted an average 23 percent rise in pretax profits for all industries for fiscal 2002, a turnaround from a 26 percent fall for the preceding year.

Tokyo stocks could keep forging ahead strongly through much of May and beyond, lifting the Nikkei back above 13,000.

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