Following hawkish remarks from the Fed leadership at Jackson Hole, the possibility of higher US interest rates is coming into focus, while AI and semiconductor stocks remain a major market focus. The dollar has strengthened against the yen, increasing uncertainty in the markets.
In a speech at Jackson Hole that attracted considerable market attention, Fed Chair Warsh assessed the economy as being in good shape, while signaling that the Fed would not rule out rate hikes if inflation remained elevated. This has increased uncertainty over the direction of US interest rates and exchange rates, with potential repercussions for the Japanese market.
AI and semiconductor stocks remain highly popular, but views are spreading that the market's momentum is beginning to fade. On 20 August, AI- and semiconductor-related stocks made a significant contribution to the Nikkei 225's performance, although SoftBank Group and Kioxia pushed the index higher, while Tokyo Electron and Ibiden weighed on it. Following Nvidia's earnings announcement on 26 August, the Japanese market shifted from an initial rise to a sharp decline, affected by Advantest's fall.
In the foreign-exchange market, the dollar continued to strengthen, and the dollar-yen rate moved into the ¥160 range despite intervention on a monthly scale among the largest on record. The outcome of the war in Iran is also uncertain. Although the outlook for AI and semiconductor stocks remains unclear, their influence on the Nikkei 225 remains strong. EPS, a key indicator of the Nikkei 225's earnings-driven market, is not expected to fluctuate significantly through November and is attracting attention as a factor that could determine the market's future direction.
Although supporting coverage spans multiple media outlets, the article focuses on AI and semiconductor stocks alongside developments in Iran and trends in interest rates and exchange rates.