Nikkei set to extend gains, eyes on BOJ, Fed

TOKYO (BestGrowthStock) – Japan’s Nikkei average is likely to extend gains on Monday from a seven-week closing high, lifted by exporters after slight gains on Wall Street, while investors keep a close eye on monetary policy reviews at home and in the United States later in the week.

Daiichi Sankyo (4568.T: ) may draw attention after Japan’s third-largest drugmaker said it aims to nearly double its annual operating profit and increase revenue by a fifth in three years as it expands sales, especially overseas.

“The market will likely continue its advance on growing hopes for corporate earnings and improvement in demand and supply, though it has become a bit overheated,” said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.

“We have policy review meetings at the Federal Reserve and the Bank of Japan this week, and their decisions on the direction of their respective monetary policy are a big focus.”

Sources have told Reuters that Japan’s central bank is leaning toward easing monetary policy again at its two-day policy review that ends on Wednesday.

Investors will also be watching the U.S. Federal Reserve’s policy review meeting and the meeting of EU finance ministers to discuss Greece’s financial problems.

Japan’s benchmark Nikkei (.N225: ) is poised for a higher start after Nikkei futures traded in Chicago closed at 10,800, up 1.1 percent from the Osaka close.

The Nikkei is likely to move between 10,650 and 10,850 on Monday, market players said. On Friday, the index rose 0.8 percent to 10,751.26, its highest finish since January 21.

On the week, the Nikkei gained 3.7 percent, its biggest weekly rise in more than 3 months.

Mixed consumer and retail data kept U.S. stocks (Read more about the stock market today. ) near break even on Friday, but major indexes edged higher for a second straight week.

Wall Street ends flat after mixed data (.N: ) > Dollar slides to 1-mo low vs euro; sterling rises (USD/: ) > Long-dated debt climbs on mixed economic signals (US/: ) > Gold ends week $30 lower despite dollar drop (GOL/: ) > Oil drops 1 pct, consumer confidence weighs.

STOCKS TO WATCH

— Toyota Motor Corp

In the latest blow to Toyota, a Southern California prosecutor filed the first consumer protection lawsuit against the automaker, claiming it had engaged in “fraud” by hiding evidence of dangerous vehicle defects.

— Nippon Telegraph and Telephone Corp

The Japanese government is considering splitting off the fiber-optic businesses of Nippon Telegraph and Telephone Corp to create a new company, the Yomiuri Shimbun reported on Monday.

— Softbank Corp

Softbank, Japan’s third-largest mobile phone operator, said it would invest in bankrupt rival Willcom Inc as it aims to expand its network and close the gap with NTT DoCoMo (9437.T: ) and KDDI Corp.

— Inpex Corp (1605.T: ), other energy-linked shares

Oil slipped more than 1 percent toward $81 a barrel on Friday, as data showing a drop in U.S. consumer confidence reignited investor concerns about energy demand in the world’s largest oil consumer.

Stock Report

(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)

Nikkei set to extend gains, eyes on BOJ, Fed