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Tokyo - Japanese stocks may find support next week after weekend upper house elections in which Prime Minister Shinzo Abe's ruling coalition is widely expected to win, investors said Friday.
The benchmark Nikkei 225 index gained 0.58%, or 83.66 points, to 14 589.91 in the week to July 19, while the Topix index of all first-section shares rose 0.83%, or 9.99 points, to 1 211.98.
"The market may get volatile next week, but the bottom line is expected to be well supported," said Kenji Shiomura, strategist at Daiwa Securities.
"The Sunday election is largely expected to end up in a victory for Prime Minister Abe's ruling coalition. If the result comes out along those lines, that will give more support to share prices.
"Domestic investors may well be expecting the election result, but foreign investors may find it a factor for buying."
The Nikkei index continued edging up for most of the week before it fell 1.48% Friday, dragged down by a stronger yen.
The day got off to a positive start after Wall Street saw another record close, but the Nikkei reversed course in late morning trade, tumbling 2.67% at one stage.
"Foreign investors are the most common buyers of futures and had been picking them up over the last 10 days or so in anticipation of the Sunday upper house diet elections," Tachibana Securities market adviser Kenichi Hirano told Dow Jones Newswires.
"It's very possible that with an overheated and thin-volume market, they are testing to see how far the Nikkei could fall."
The national polls will elect half of Japan's 242-member upper chamber of parliament, which Abe's ruling party is expected to win. A solid showing would give Abe the legislative muscle to press on with an economy-boosting plan that could include some unpopular reforms.
On Friday the yen rebounded after seeing losses in the United States. The dollar slipped to ¥100.14, compared with ¥100.50 in New York late Thursday.
The stronger yen hit exporters. Toyota shed 0.15% to ¥6 470while Sony lost 0.27% to ¥2 188.
Panasonic edged down 0.11% to ¥879 after US authorities said the Japanese giant and its subsidiary Sanyo have pleaded guilty to price-fixing, agreeing to pay $56.5m in fines.
Japan Airlines shares fell 0.93% to ¥5 320 after one of its Dreamliner planes aborted a flight from Boston to Tokyo Thursday.
