Japanese stocks rose sharply for a second consecutive session at the start of the week, with the Nikkei Average closing at ¥66,399. The market was supported by trends in US employment data and strength in overseas equities.
The Nikkei Average rose sharply at the start of the week, closing ¥1,378 above the previous weekend at ¥66,399 and recovering the ¥66,000 level for the first time in 4 sessions. Buying led the market amid strength in overseas equities, although the move also appeared to lack support from underlying demand.
In the US market, employment data exceeded market expectations, strengthening expectations of a rate hike. The Dow fell, but the decline in technology stocks was limited, while persistent semiconductor demand supported the market.
Buying was concentrated in Japanese names in the Tokyo market, which at one point moved above the 25-day moving average of ¥66,149. However, it did not reach the 75-day moving average of ¥66,798, and the market was still viewed as being in a consolidation period in the rebound phase.
As expectations surrounding an additional rate hike by the Bank of Japan remain priced in, the market is expected to enter a phase of digesting these factors in the short term.