Japanese stocks are expected to trade within a narrow range in the second week of September, with strong earnings providing downside support. At the same time, investors will continue to assess monetary policy decisions in Japan and the US and movements in the yen.
Japanese stocks are expected to trade within a narrow range in the second week of September (7–11 September). Strong corporate earnings outlooks are expected to support the market, while investors remain focused on monetary policy decisions in the US and Japan and currency movements, including the possibility of a sustained appreciation of the yen.
Key economic indicators include the revised April-June GDP figure, the July Monthly Labour Survey, and speeches and press conferences by BOJ Policy Board members. In the US, the CPI release is seen as likely to be key to interest-rate decisions.
However, these events are not expected to produce clear signals, making it difficult for the market to establish a firm direction. Trading is therefore likely to remain limited until the next FOMC and BOJ meetings have concluded. Market participants are conscious of uncertainty surrounding interest rates and foreign exchange.
In the previous week, rising tensions between the US and Iran pushed up crude oil prices. The yen strengthened against the dollar, while TOPIX fell approximately 1% for the week. Going forward, macroeconomic indicators and central bank developments are expected to remain key market drivers.