Semiconductor and AI-related stocks rose in U.S. markets during the holiday break and the yen weakened, while uncertainty over the Middle East situation, higher oil prices and trends in U.S. long-term interest rates kept the upside in check.
Buying of semiconductor and AI-related stocks led the move in U.S. markets during the holiday break. The trend spread to the Tokyo market, supporting confidence in buying the Nikkei 225, while rising long-term interest rates and stronger bond selling in the U.S. market became factors limiting the upside.
The yen weakened to the ¥158-per-dollar range, and currency movements affected investor sentiment. Nikkei 225 futures also extended their gains in the night session, providing a provisional buying catalyst.
Uncertainty over the outlook for the Middle East situation could weigh on the market, and volatility is expected to depend on movements in oil prices and U.S. long-term interest rates. Caution is also likely to persist around the 24th, when a U.S.-China leaders' meeting is scheduled.
The levels of ¥67,000, ¥68,000, ¥69,000 and ¥70,000 were cited as upside milestones, while ¥65,000, ¥64,011, ¥63,000 and ¥62,726 were identified as potential downside levels. Attention will focus on assessing risk factors and the outlook around these levels.