The gains and losses during Bon holiday week are said to influence market sentiment in August. Historical data reportedly shows that movements during Bon holiday week tend to coincide with the market's positive or negative performance for August as a whole.
A chart indicates a relationship between the Nikkei 225's performance during Bon holiday week and its performance for August as a whole. Over the 13 years from 2000 to 2012, the market tended to form a bullish candle for August when it rose during Bon holiday week, and a bearish candle when it fell.
On the weekly Ichimoku chart, the Conversion Line and Base Line are expected to enter an uptrend this week. If conditions remain favourable, the Conversion Line could rise sharply in the final week of August, which is seen as a factor that could lift the market in the second half of the month. The calculations indicate that the Conversion Line could strengthen its uptrend in September and rise to ¥13,170, while a decision to hold the Olympics in Tokyo is said to raise expectations of renewed buying of Japanese stocks.
At the same time, this relationship is merely an anomaly, and if the current weakness continues, there is a substantial possibility that prices could fall below the June low toward month-end. Some also reportedly believe that caution is warranted regarding the stock market's lead over the period through the end of August and the extent to which expectations have already been priced in.
Recent reports from securities companies have highlighted the Olympics' economic impact and related stocks. The effects on sectors such as construction, real estate and services are reportedly attracting attention.