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Upward momentum is likely to re-emerge in the Tokyo market, analysts said Friday, as players wait for a key business confidence survey to gauge the impact of a Japanese tax hike.

The market will look to Japanese industrial production for May to be issued on Monday, followed by the release of the all-important tankan business confidence report from the Bank of Japan on Tuesday.

The two major indicators will serve as fresh evidence to gauge the impact, or a lack of it, of the hike in consumption tax to eight percent from five, which came into effect in April, Nomura Securities said in a note to clients.

The data will come after various surveys have shown that the tax hike has moderately but not significantly dented the economy, with a gradual pickup seen on the horizon.

Daiwa Securities (Other OTC: DSECF — news ) noted that Tokyo shares have been surging, fuelled by a robust Wall Street performance, before succumbing to profit taking in the past few days.

We believe there is a possibility for the Nikkei index to climb higher if recovery hopes are reignited after the release of tankan, Daiwa Securities said in its note.

Global investors will also digest a series of key US indicators, including manufacturing activities, jobs data, and trade figures.

Many of the key US indicators could show upswings, but caution is needed in case the Chicago Purchasing Managers Index shows an unexpected downturn, Daiwa added.

Daiwa also cited the violence in Iraq and surges in oil prices as potential risks.

On Friday, Tokyo stocks closed down 1.39 percent, weighed by poor US economic data and with a stronger yen dampening exporter shares.

The Nikkei 225 index ended at 15,095.00, down 213.49 points or 1.39 percent, logging its sharpest percentage decline in six weeks.

For the past week, the headline index marked a 1.66 percent fall.

The Topix index of all first-section issues was down 0.81 percent, or 10.28 points, to 1,253.15, or a weekly fall of 1.24 percent.

- ‘Routine correction’ -

Tokyo shares fell particularly sharply on Friday, but traders were not panicked.

It’s probably a bit early to be calling today’s sell-off anything more than a routine correction after such a long period of consistent buying, Investrust chief executive Hiroyuki Fukunaga said.

The Dow Jones Industrial Average slipped 0.13 percent to 16,846.13 on Thursday following disappointing US consumer spending data.

Investors were watching the data for clues to how the world’s largest economy was faring and when the Federal Reserve will raise interest rates.

The US economic recovery is proceeding slower than most people had foreseen, and it will probably take longer for the Fed to ratchet up interest rates as a result, said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

The dollar fell to 101.40 yen in Tokyo afternoon trade from 101.70 yen in New York Thursday afternoon.

Exporters, which are vulnerable to a strong yen due to the dent it makes in repatriated profits, were down, with Sony falling 1.40 percent to 1,679 yen and Canon (Other OTC: CAJFF — news ) off 1.88 percent at 3,277 yen.

Mitsubishi Motors closed down 0.35 percent at 1,121 after giving up early gains on a report in the Nikkei economic daily that it would begin supplying Fiat Chrysler Automobiles with sedans for sale in Asian markets later this year.

— Dow Jones Newswires contributed to this article —