Tuesday, September 17, 2013
Nikkei Seen Moving Higher This Week On Fed Policy Hopes
TOKYO (NQN)--Tokyo stocks will likely continue rising this week, with easing concerns about the situation in Syria making investors less skittish.
A focus will be on the two-day meeting of the Federal Open Market Committee, which kicks off Tuesday, U.S. time. If the Federal Reserve Board decides to start tapering its quantitative easing policy, as most market players expect, the dollar will strengthen against the yen in the expectation that the gap between Japanese and U.S. interest rates will expand, giving steady momentum to Japanese stocks. The Nikkei Stock Average may move in the 14,600 to 14,800 range this week, the highest level since July.
Lawrence Summers withdrew his name from consideration for the post of Fed chairman, although the former treasury secretary was seen as the prime candidate. Summers is seen as having a more skeptical view about the effects of quantitative easing than other candidates, including Fed Vice Chairman Janet Yellen. As such, expectations are growing among market players that the U.S. will continue its quantitative easing following Summers' withdrawal.
U.S. short- and long-term interest rates are falling, making investors more willing to take risks. This helped push the Dow Jones industrial average to a roughly 1-month high last week, a development that is expected make Japanese stocks solid throughout the week.