The Nikkei Average fell for the second consecutive week, ending last week at ¥64,011. With monetary policy events including the US FOMC and the Bank of Japan meeting due this week, market developments will be closely watched.
The Nikkei Average fell ¥1,009 last week to close at ¥64,011, marking a second consecutive decline of more than ¥1,000, as higher oil prices driven by concerns over the situation in the Middle East, rising interest rates and a stronger yen weighed on the market. Although major indexes were broadly sold, buying back into the market helped support the Nikkei, which showed resilience around the ¥65,000 level.
This week's focus will be monetary policy events, including the US FOMC, and market reactions could vary depending on whether interest rates are raised. The Bank of Japan will also hold a monetary policy meeting, with the pace of future rate hikes drawing attention.
The Nikkei Average is expected to remain in a range centered around ¥65,000, and could test higher levels if positive catalysts emerge. Movements in AI and semiconductor-related stocks, financial stocks, and resource and shipping stocks that benefit from higher oil prices could influence the market.
The outcomes of monetary policy decisions in Japan and the US will be major factors this week, and the ¥60,000 level is expected to be watched as a downside target. Share prices may continue to trade around ¥65,000 while also taking their cue from moving averages and EPS and PER levels.