Powell Speech, Economic Data Seen Affecting Tokyo Stocks Next Week

Tokyo, Aug. 23 (Jiji Press)--A speech by U.S. Federal Reserve Chairman Jerome Powell and economic data will likely be among factors to set the course for Tokyo stocks next week, analysts said. This week, the 225-issue Nikkei average on the Tokyo Stock Exchange advanced 292.1 points, or 1.43 pct, to end at 20,710.91 on Friday. The rise came as concerns over an escalation of the U.S.-China trade dispute eased after Washington decided to extend for three months the period in which major Chinese telecommunications equipment maker Huawei Technologies, at the center of the tensions, is allowed to deal with U.S. companies in some areas. Next week, the Nikkei is expected to move between 20,300 and 20,900, analysts and brokers said. The Nikkei may gain ground if Powell makes dovish comments on interest rates in his speech at a financial symposium in Jackson Hole, Wyoming, later on Friday and U.S. stocks rise as a result, they said. On the other hand, hawkish comments may pull down the Nikkei, they added. The Fed cut its federal funds rate target by 0.25 percentage point in late July in its first interest rate reduction in about 10 and a half years. At a press conference that followed the decision, Powell said that "it's not the start of an easing cycle." "If Powell shows a similar stance at the symposium although the situation has changed since that time," with U.S. President Donald Trump announcing this month a decision to slap additional tariffs on Chinese goods on Sept. 1, the stock market "would see his remarks hawkish," Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co., said. Meanwhile, Yutaka Miura, senior technical analyst at Mizuho Securities Co., said that the Tokyo market may be pressured by selling on concerns over a slowdown in the global economy if data, including U.S. durable goods orders for July, due out on Monday, show weak readings. Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., also warned that concerns over the U.S.-China trade war may grow later next week, ahead of the launch of the additional U.S. tariffs. END