Wednesday, September 18, 2013
STOCK FOCUS: Nikkei Could Hit 16,000 Depending On FOMC
TOKYO (NQN)--Investors are buying automakers and blue chips Wednesday in Tokyo, while buying of Olympics-related stocks, mainly by retail investors, has paused. These moves are likely due to the upcoming results of the Federal Open Market Committee meeting, which investors predict will indicate only a slight scaling back of U.S. quantitative easing as widely expected.
If the FOMC meeting results meet market expectations, the focus of investors' attention will shift to earnings of Japanese companies. With the current foreign exchange rates, many companies are expected to revise their annual forecast upward in the interim earnings announcements. On the stock market, buying will become increasingly selective as investors hunt for shares in automakers and other companies that are expected to show significant improvements in their earnings.
If the government decides to raise the consumption tax and unveils economic stimulus measures, it is highly likely that purchases by overseas investors will increase. With Japanese stocks regaining momentum, the Nikkei Stock Average will likely head for 16,000 in October.
-- Translated from market commentary by Shoichi Arisawa at IwaiCosmo Securities Co.