TOKYO: Tokyo stocks may drop further next week amid growing concerns over the possible reinstatement of restrictions on economic activities due to continuing rises in infection cases in and outside Japan.

This week, the benchmark Nikkei average of 225 select issues on the Tokyo Stock Exchange’s first section fell 205.60 points, or 0.91 percent, to end at 22,306.48 on Friday, with investor sentiment dampened by increasing coronavirus infection cases.

But the market showed some resilience, supported by better-than-expected US economic data, including the Institute for Supply Management’s manufacturing index for June and jobs data for the same month from the Labor Department.

Next week, the Nikkei is expected to move between around 21,500 and 22,500, analysts and brokers said.

“Market attention is expected to be focused on the number of coronavirus cases in the United States and Japan while there will be no major economic data releases other than the ISM’s nonmanufacturing index for June, due out on Monday,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

If coronavirus cases increase at an accelerated pace worldwide to shatter hopes for an early economic recovery, Tokyo stocks may go down further next week, another market source said.

Masayuki Otani, chief market analyst at Securities Japan Inc., offered a somewhat bearish outlook, saying that the stock market is unlikely to see many positive factors.

But he added that the market’s downside will be supported by strong appetite to buy the dips amid enhanced monetary easing by the central banks around the world.

JIJI Press