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Tokyo investors eyeing Fed meet, Japan data next week

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Tokyo investors will be looking to a US central bank meeting and economic data including Japanese inflation next week, amid simmering concerns about the spread of the deadly Ebola virus.

[TOKYO] Tokyo investors will be looking to a US central bank meeting and economic data including Japanese inflation next week, amid simmering concerns about the spread of the deadly Ebola virus.

The Federal Reserve starts a two-day policy meeting on Tuesday.

The central bank plans to exit its massive stimulus programme this month, but a recent slate of mixed US data has thrown into question the strength of the world's top economy.

"The Fed is largely expected to complete its tapering, but we also want to keep an eye on what (Federal Reserve chief Janet) Yellen says about the prospects for future policy," said Kenzaburo Suwa, strategist at Okasan Securities in Tokyo.

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The market will look to US gross domestic product (GDP) figures for the third quarter on Thursday, as well as a slate of Japanese data including inflation and a one-day Bank of Japan meet on Friday.

"Investors will also be paying attention to earnings as another (Japanese) corporate results season has just begun," Suwa added.

Japanese stocks rose 1.01 per cent on Friday as the Nikkei 225 index at the Tokyo Stock Exchange finished up 152.68 points at 15,291.64.

The Nikkei tacked on 5.22 per cent over the past five sessions, snapping a four-week losing streak.

The broader Topix index of all first-section shares rose 0.81 per cent, or 9.98 points, to 1,242.32. It gained 5.53 per cent this week.

"The weaker yen should naturally benefit Japan stocks, and help to highlight the fact that shares are looking cheap from many perspectives," said Mutsumi Kagawa, senior global strategist at Tokai Tokyo Research Center.

The dollar rose into the 108-yen range as risk sentiment was lifted by encouraging Chinese manufacturing data and solid readings for eurozone business activity.

A weak yen is positive for Japanese exporters as it makes them more competitive abroad and inflates profits when repatriated.

Despite Tokyo's rise, investors will be keeping a close eye on the situation in New York where officials on Friday confirmed the city's first known case of the Ebola virus.

Toyota shares rose 1.75 per cent to end at 6,151.0 yen, following a report that it is set to book a record operating profit in the six-month period to September.

Auto parts giant Takata lost 2.78 per cent at 1,538.0 yen, adding to losses following a report this week that US justice officials are investigating the firm over an air bag defect that may have killed several drivers.

Honda fell 1.29 per cent to 3,322.0 yen after the automaker said its top executives would return as much as 20 per cent of their salary for several months to atone for a recall of more than 425,000 vehicles in Japan due to electrical system glitches.

AFP

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