TOKYO: Downside risks are expected to remain for Tokyo stocks next week, with attention focused on the number of new coronavirus cases in and outside Japan, developments over global efforts to resume economic activities and U.S.-China relations over the coronavirus pandemic.

This week, the Nikkei average of 225 selected issues on the Tokyo Stock Exchange's first section fell 141.62 points, or 0.70 percent, to end at 20,037.47.

Hopes for an economic recovery grew thanks to the Japanese government's lifting of the state of emergency over the coronavirus in 39 of the country's 47 prefectures, but buying was limited due to uncertainties over developments associated with the novel virus.

Next week, the Nikkei is expected to move mainly between 19,000 and 20,500, analysts and brokers said.

"The Nikkei could fall as low as 19,000 if Wall Street suffers a sell-off amid growing concerns over U.S.-China relations," said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

In a media interview Thursday, U.S. President Donald Trump said he was "very disappointed in China" over the country's failure to prevent the coronavirus pandemic and suggested the possibility of cutting the "whole relationship" with the world's second-largest economy. "Right now I don't want to speak to him (Chinese President Xi Jinping)," Trump noted.

Another major brokerage house official forecast that the Nikkei could plunge far below 20,000 if fears over a second wave of virus infections heighten at a time when no end to the global outbreak is in sight.

Domestically, investors are expected to focus attention on a meeting of the government's coronavirus response headquarters to be held on Thursday to assess infection conditions in the remaining eight prefectures including Tokyo and Osaka.

"If the state of emergency ends in Tokyo and economic activities in the capital head for resumption, that would be major support for stock prices," an official of a major brokerage house said.

Other possible market-moving factors next week include Japan's gross domestic product data, due out Monday, as well as earnings reports by electronics giant Panasonic, technology investor SoftBank Group and other major Japanese companies, market sources said.

JIJI Press