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Tokyo investors look to G20, US and Japan data next week

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(Globalpost/GlobalPost)

Tokyo investors next week will look to fresh US and Japanese data, as well as a meeting of finance officials from 20 major economies who gather in Sydney this weekend.

All eyes will be on US housing, consumer confidence and growth figures as markets look for clues about the state of the world's biggest economy following sub-zero winter temperatures in many parts of the country.

"There will be caution given the possibility that (the US data) will come in weaker than expected due to the cold weather," Daiwa Securities said in a client note.

February consumer confidence figures are due to be released on Tuesday, followed by durable goods orders and initial jobless claims on Thursday.

On Friday, the final estimate for fourth-quarter US gross domestic product is out.

Japan publishes a string of data, including key inflation figures, earlier the same day.

Recent volatility in the currencies of emerging economies will be high on the agenda as G20 central bankers and finance chiefs meet at the weekend.

Currencies from Argentina to Russia, South Africa and Turkey have been in freefall, in part because heavyweight US investors are repatriating funds in anticipation of higher returns at home as the Federal Reserve tightens years of relaxed monetary policy.

On Friday, Tokyo's Nikkei index jumped 2.88 percent to finish at 14,865.67, clawing back losses from the previous day, as Wall Street rallied while the yen dropped.

The index rose 3.86 percent over the week, its first positive week since the start of the year.

The broader Topix index of all first-section shares rose 2.32 percent on Friday to 1,222.31, marking a 3.25 percent weekly gain.

- market volatility -

After surging in 2013 to its best annual run in over four decades, the Nikkei has fallen 9.0 percent since the start of this year as global markets were hit by heavy volatility.

Investors returned to Tokyo shares after the market turned down Thursday on disappointing data, including weak Chinese manufacturing figures that dented confidence in the strength of the global economy.

Bargain hunting stoked Friday's gains with the market boosted by a weakening yen, a plus for Japanese exporters as it makes them more competitive abroad and inflates repatriated overseas profits.

Toyota shares added 2.08 percent to finish at 5,982 yen, while Sony rose 1.43 percent to 1,766 yen.

Camera and copier maker Canon was up 1.16 percent to 3,123 yen and market heavyweight Fast Retailing, operator of the Uniqlo clothing chain, jumped 3.56 percent to 35,755 yen.

"Investors are most keen to know whether the recent apparent lull in the US economic recovery is really due to data skewed by bad weather or needs to be taken more seriously," said Mutsumi Kagawa, senior global strategist at Tokai Tokyo Research Center.

"It will take more time to confirm," he told Dow Jones Newswires.

In the US, investors took some comfort from gains in Markit's US purchasing managers index on Thursday, while new jobless claims fell last week although not as much as expected.

The data offered some better news after new US home construction and building permits plunged more than expected in January amid severe winter weather in large parts of the country.

"It seems the market, at least for now, is not too concerned about the recent run of disappointing US releases especially given the element of bad weather, though one might start to wonder whether this will remain true if more tier-1 data goes in this direction," Credit Agricole said.

On forex markets, the dollar strengthened to 102.41 yen, from 102.32 yen in New York Thursday.

si-hih/pb/lto

http://www.globalpost.com/dispatch/news/afp/140221/tokyo-investors-look-g20-us-and-japan-data-next-week