Financial markets in Japan are expected to find a firm footing following Prime Minister Yoshihide Suga's pledge to continue with his predecessor Shinzo Abe's economic policies to bring the coronavirus-stricken economy back onto a growth track.

Market participants are closely watching whether the new prime minister will dissolve the Lower House for a snap election in the coming months to strengthen his grip on power, a move that could boost confidence over the continuity of economic policy.

The benchmark 225-issue Nikkei average is expected to test an upside of around 24,000 by the end of the year and could even rise to 24,500, analysts said. The index's downside is likely to remain firm around 22,000. The Nikkei ended Wednesday up 20.64 points, or 0.09 percent, at 23,475.53 after Suga was elected new prime minister at an extraordinary parliamentary session.