Tokyo: Tokyo stocks are expected to be top-heavy next week as investors wait for  further buying cues, market sources said.

This week, the benchmark Nikkei 225 average climbed 739.40 points, or 2.04 pct, from the previous week to end at 36,897.42 on Friday, after briefly topping the psychological threshold of 37,000 for the first time in 34 years.

The Nikkei 225 was driven higher by gains in its heavyweight components, including SoftBank Group, while the overall market saw a mix of buying and selling over recent corporate earning reports.

Next week, the Nikkei is expected to move roughly between 36,100 and 37,200, analysts and brokers said.

The market is expected to continue attracting buying from foreign investors and from individual investors using Japan’s Nippon Individual Savings Account tax-exemption program for small-lot investments, which was expanded last month.

Meanwhile, an official at a major brokerage firm predicted that investors will be “cautious about chasing higher prices” as the ratio of stock prices to projected earnings for the Nikkei’s components has risen as high as around 16.

Investors are expected to “monitor trends until new trading incentives emerge,” the brokerage official said.

Japanese companies will continue to release earnings reports, but few large firms are scheduled to make announcements next week. “There will be no market-moving cues until the release of (U.S. semiconductor giant) Nvidia Corp.’s earnings report the week after next week,” the brokerage official added.

Meanwhile, chipmaking gear maker Tokyo Electron’s earnings report, released after the closing bell on Friday, may have an impact on other semiconductor-related shares early next week.

“An unexpected incentive might drive (the Nikkei) above 38,000,” an official at a domestic securities firm said.

The official also said that investors’ attention may shift from earnings reports to macroeconomic factors next week, as the U.S. consumer price index for January is set to be released Tuesday.

JIJI Press