Japanese and US equity markets recovered on the tailwind of stronger corporate earnings, with the S&P 500 and Dow setting new record highs and the Nikkei 225 closing at ¥66,970. Investor concerns over US tech stocks temporarily eased.
Japanese and US equity markets generally recovered as buying prevailed on the back of earnings results. Corporate earnings growth attracted investor funds, with reports suggesting that money also flowed into strong-performing stocks outside the AI-related sector. Although the risks of higher interest rates and a renewed acceleration in inflation remain, factors supporting the markets continued to be in place.
The Nikkei 225 closed ¥1,363 higher than the previous weekend at ¥66,970 in Tokyo trading on the 10th, recovering approximately ¥5,500 from its recent low. Trends in US markets and strong corporate earnings results supported the market as a whole, with buying also spreading to Japanese stocks.
In the US, the S&P 500 set a new record high, while the Dow likewise remained at elevated levels. Meanwhile, reports indicated that concerns surrounding US tech stocks had temporarily eased, and investors were also turning their attention to stocks outside the AI-related sector. Going forward, interest rate and inflation trends, along with the sustainability of corporate earnings, are expected to be key areas of focus.
Risk factors include the persistence of higher interest rates and the risk of inflation accelerating again, and caution will be required for stock prices to continue rising sustainably. Readers will want to keep an eye on new earnings reports from major US markets, policy developments and movements in the Nikkei 225's upside targets.