May 30, 2013 / 11:43 PM / 4 years ago

Nikkei set to rise as Fed stimulus concerns ease, market still on edge

TOKYO, May 31 (Reuters) - Japan's Nikkei share average is
set to recoup some of its recent steep losses on Friday, as soft
U.S. economic data eased concerns that the Federal Reserve would
soon start unwinding its massive stimulus.
    However, investors in Japanese equities remain on edge amid 
the recent volatile price action and sharp declines, including
Thursday's 5.2 percent slide to a five-week low that came on top
of the 7.3 percent plunge on May 23 - the worst single-day loss
since the March 2011 earthquake and tsunami.
    Market players said the Nikkei was likely to trade between
13,500 to 13,850 during the session after closing at 13,589.03
on Thursday.
    Nikkei futures in Chicago closed at 13,810, up 1.5
percent from the close in Osaka of 13,610.
    The recent selloff was triggered by worries the Fed would
taper its bond-buying programme this year and slowing growth in
China, Japan's second biggest export market. 
    Still, analysts said the recent correction that has seen the
Nikkei drop nearly 15 percent from its 5-1/2-year high on May 23
has made Japanese stocks attractive to buy back. 
    "It's not a bull market, it's just a correction," said
Kenichi Hirano, a strategist at Tachibana Securities. "The index
has broken below its 25-day moving average, and it's a
comfortable level to buy back."
    The Nikkei is currently trading 5.7 percent below its 25-day
moving average of 14,418.01. The support line is pegged at its
13-week moving average of 13,441.66, Hirano said.
    Though investors are likely to buy battered stocks, analysts
expect volatility in Japanese equities to persist for a while
longer, with investors closely watching Fed Chairman Ben
Bernanke's speech on Sunday and U.S. jobs data next week. 

> Wall St ends up on optimism Fed stimulus to remain       
> U.S. dollar slides as soft data offsets Fed taper talk 
> Prices near flat as investors weigh Fed's course        
> Gold hits 2-wk high as U.S. data quells Fed taper talk 
> Crude oil ends mixed, swayed by views on economy and Fed 
    STOCKS TO WATCH
    
    -- Tokyo Electric Power Co 
    Fukushima nuclear plant operator Tokyo Electric Power will
ask for additional funds from the Japanese government as early
as Friday to pay those affected by the reactor meltdown two
years ago, the Nikkei reported. 
    
    -- Sony Corp 
    Sony has tapped Morgan Stanley and Citigroup to
help sound out options for its entertainment business, according
to a media report.

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