Tokyo stock prices are likely to hold firm in the coming week on hopes a post-election Japan will see aggressive monetary and fiscal policy, analysts said Friday.
Shares soared to their highest close in more than six months Thursday as a weaker yen boosted markets amid speculation that the Bank of Japan will launch further economy-boosting easing.
Liberal Democratic Party (LDP) leader Shinzo Abe, tipped to become prime minister after a December 16 election, last week called for "unlimited" easing by the BoJ, and vowed to strike a deal with it over further measures if he wins.
Stock prices were "likely to stay firm even after gains this week as expectations of monetary easing will keep the yen cheaper", thereby favouring exporters, said Hiroaki Hiwata, strategist at Toyo Securities.
On the currency market, the dollar was up to 82.70 yen, around a seven month high.
Last week, the dollar was changing hands at levels between 80 yen and 81 yen.
In the week to November 22, the benchmark Nikkei 225 index at the Tokyo Stock Exchange rose 3.80 percent, or 342.64 points, to 9,366.80, its best finish since early May.
The broader Topix index of all first-section issues gained 3.34 percent, or 25.09 points, to end at 776.43.
Hiwata expects the Nikkei index will move in a range of 9,100 and 9,400 in the coming week.
"Just as the recent Nikkei rally has been almost entirely due to the weaker yen, further gains will depend on the currency market," Investrust CEO Hideyuki Fukunaga told Dow Jones Newswires.
"But barring another leg up in the dollar, upside resistance will get tougher ahead, and the Nikkei's ability to break through the 9,400 mark will tell us a lot about whether a further run to 9,500 and beyond is conceivable in the near-term," he said.