The Nikkei is expected to open higher, supported by gains in US stocks on the 28th amid a 1.76% rise in the US SOX Index. Attention will also focus on futures movements before the market opens on the 29th.
In the US market on the 28th, the NY Dow rose 0.19%, the Nasdaq Composite rose 0.27% and the S&P 500 rose 0.28%, with all 3 major indexes closing higher. The SOX Index ended up 1.76%. This is the backdrop to movements in the Tokyo market.
The SOX Index's gain was well above those of the other major indexes, suggesting strong fund inflows into technology and semiconductor-related stocks. In the Tokyo market on the 29th, buying could spread to semiconductor-related stocks following this trend.
In the previous day's Tokyo market, the Nikkei rebounded to close at ¥63,954.19, up ¥685.82, while futures were also firm in the early hours of the 29th. Buying interest is expected to remain intact at the open, but differences in tradability between futures and cash equities leave the market at risk of profit-taking and selling by investors waiting for a rebound immediately after the open.
In the external environment, the US dollar was holding firm against the yen at around ¥157.87-88 per dollar. Yen weakness supports the earnings of exporters, while also pushing up the import costs of raw materials and energy. Oil price movements could also affect corporate earnings.