Next week will be a test ahead of central bank week. Economic indicators, including the US employment report, are expected to influence market decisions, while Japanese stocks are likely to remain resilient, supported by buying on dips.
Japanese stocks showed resilience this week, with the Nikkei 225 holding above ¥65,000, and important indicators, including the US August employment report, are scheduled to be released in succession next week. Ahead of central bank week, activity aimed at gauging the direction of monetary policy is likely to intensify.
The response of AI and semiconductor stocks to US corporate earnings was limited, but buying on dips remains evident and is expected to provide support for Japanese stocks. However, attention will need to be paid to higher crude oil prices and geopolitical risks, while expectations for lower interest rates may also grow at times.
In Japan, the timing of a Bank of Japan rate hike has emerged as a focus for the market, and the factors needed to assess monetary policy will come together alongside next week's indicator releases. Attention will be focused on sector rotation in Japanese stocks and the sustainability of buying on dips, as indicated by economic data such as revised corporate statistics for the April-June quarter.
The forecast range for the Nikkei 225 next week is ¥64,500-¥68,500, and there is a view that demand for semiconductor and AI-related stocks and the strength of corporate earnings will support market resilience. Against a backdrop of supply-side strength and the benefits of a weaker yen, attention is also focused on the performance of a range of stocks, including bank stocks.