Japanese stocks seen range-bound next week

TOKYO, Feb 25 (AFP): Japanese shares are likely to stay range-bound and may test the upside next week if investors' focus shifts from political turmoil in Libya to the global economic recovery, brokers said. In the week to February 25, the headline Nikkei index at the Tokyo Stock Exchange dropped 2.91 per cent, or 316.04 points, to 10,526.76. The Topix index of all first section issues shed 3.25 per cent, or 31.67 points, to 941.93. The Nikkei was hurt earlier this week as deepening political turmoil in Libya and rising oil prices soured sentiment. US oil prices hit a multiyear high above $100 per barrel while Brent North Sea crude almost touched $120. However, the index rebounded Friday thanks to easing oil prices after the Organisation of Petroleum Exporting Countries said it would be able to produce more crude if the unrest led to supply disruptions. "Stocks are expected to move in a narrow range but their undertone will be solid," said Hiroichi Nishi, equity general manager at Nikko Cordial Securities. "Investors will continue to closely watch the situation in North Africa and the Middle East, while key US and Japanese economic indicators are also on focus next week," Nishi said. If the uprising in the region calms down, "investors will turn their eyes to data indicating the economic recovery," Nishi said. Yumi Nishimura, deputy general manager of investment strategy at Daiwa Securities Capital Markets, told Dow Jones Newswires: "The view toward economic recovery may strengthen again" if closely-watched US economic indicators such as payrolls data turn out strong. The US employment report for February is due out on March 4, while Japan's industrial production for January will be announced on Monday. Meanwhile, Japanese shares gained 0.71 per cent Friday as dealers breathed a sigh of relief over easing oil prices, despite ongoing turmoil in Libya, brokers said. The benchmark Nikkei index of the Tokyo Stock Exchange firmed 74.05 points to 10,526.76 and the Topix index of all first section shares added 0.83 per cent or 7.71 points to 941.93. Analysts attributed the buying to a decline in oil prices, which came after the Organisation of the Petroleum Exporting Countries (OPEC) said they would boost output to meet any shortfall caused by Middle East unrest.