AI and semiconductor stocks drove trading in the Tokyo market this week. With earnings season largely over, few catalysts are expected next week, and the market's direction could become unstable depending on developments in the United States.
The Nikkei Stock Average ended this week's Tokyo stock market at ¥68,713.80, up ¥3,107.09 from the previous weekend. Concerns about an early rate hike receded against the backdrop of weaker-than-expected U.S. jobs data, prompting buying in AI- and semiconductor-related stocks. With earnings announcements largely over, however, fewer stock-specific catalysts are expected to guide trading from next week onward. NVIDIA's earnings announcement and the Jackson Hole meeting are scheduled for next week, and the market could experience sharp swings depending on the performance of AI-related stocks.
The performance of U.S. semiconductor stocks will remain a market focus from next week onward. Applied Materials' share price fell at one point after the company released its earnings, with selling spreading to Broadcom and Intel. Movements in the U.S. SOX Index and earnings trends in the U.S. market are likely to affect AI- and semiconductor-related stocks in the Tokyo market. A strong wait-and-see mood is expected to take hold next week ahead of NVIDIA's earnings and the Jackson Hole meeting.
Once earnings season has run its course, investors are likely to shift toward thematic stock selection, and buying interest in non-AI stocks could provide relative support in some cases. In the U.S. market next week, retail companies are scheduled to announce their earnings, which could also affect the performance of non-AI stocks in the Japanese market.
GDP data, exchange-rate movements and expectations for a Bank of Japan rate hike will be market focuses. April-June GDP is expected to show growth of about 0.5% from the previous quarter, while dollar-yen trading is expected to remain focused on the ¥160 level. Developments in the Middle East also warrant attention, and the market is expected to remain directionless next week ahead of earnings announcements and other events.