With expectations for a US rate hike reported to have receded ahead of key US economic indicators, Japanese stocks surged after three sessions. Buying centered on AI-related and semiconductor stocks, while market direction is drawing attention ahead of this week’s inflation data releases.
In Tokyo trading at the start of the week, the Nikkei Average surged after three sessions, as expectations for a US rate hike receded following the results of the US July jobs report. Buying was broad-based, centered on AI and semiconductor stocks, prompting market participants to focus on a broad-based rebound in buying.
With the release of important indicators such as CPI and PPI scheduled in the US this week, the market is expected to move while monitoring developments in monetary policy. Sawada Ryotaro (澤田遼太郎) believes the flow of funds back into AI pick-and-shovel stocks will continue.
While identifying renewed buying of AI-related stocks as a theme to watch, he pointed to the possibility that stocks such as Fujikura and Advantest could become the main destinations for funds. Attention is also likely to turn to game-related stocks, including Nintendo, Sony Group and Bandai Namco.
The focus ahead will be the release of various indicators related to monetary policy in Japan and the US, as well as the Jackson Hole symposium. While the Nikkei could return to the ¥70,000 range, the view is that the market could also undergo a correction during an advance.