Nikkei may edge up but stay stuck in tight range

TOKYO (BestGrowthStock) – Japan’s Nikkei average may open slightly higher on Friday after signs of economic recovery helped lift Wall Street, but stocks may be stuck in a narrow range due to worry about overheating in the market.

The Nikkei has traded flat for the past four days, after having rallied about 12 percent since early November, and the market will need new trading incentives to break out of the tight 190-point band it has been stuck in for more than a week.

“Unless the dollar comfortably trades above a mid-84 level before the opening bell, the market may again see directionless trade today,” said Yutaka Miura, senior technical analyst at Mizuho Securities.

The benchmark Nikkei will likely trade between 10,250 and 10,400, analysts said, after ending virtually unchanged at 10,311.29 the previous day.

Still, market observers said signs of recovery in the U.S. economy may continue boosting sentiment in Japanese stocks in the long term.

Economic bellwether FedEx Corp raised its full-year outlook, though its quarterly profit and revenue missed expectations,

sending shares in the package shipper up 2 percent.

Meanwhile, factory activity in the U.S. mid-Atlantic region unexpectedly rose in December, while jobless claims dipped for a second week.

“In the midterm, some domestic factors will also likely lift stocks,” said Hiroichi Nishi, general manager at Nikko Cordial Securities.

The Bank of Japan on Thursday made its first purchase of real estate investment trusts, completing the rollout of its asset buying scheme launched in October that aims to push down risk premium and corporate borrowing costs.

In early Asian trade, the dollar was trading near 84.00.

(Reporting by Ayai Tomisawa; Editing by Chris Gallagher)

Nikkei may edge up but stay stuck in tight range