The Nikkei Average closed at ¥64,425.95 on 15 October, down ¥3,318.34 from the previous day, marking its third-largest decline ever. This report examines downside targets and potential rebound catalysts to assess the market’s outlook.
The Nikkei Average closed at ¥64,425.95 on 15 October, down ¥3,318.34, or 4.9%, from the previous day, marking its third-largest decline ever. The main factors were selling in AI-focused cloud-related stocks in the US market and declines in AI and semiconductor stocks, which triggered the Nikkei’s fall. US technology stocks were said to have affected the domestic market amid credit concerns surrounding CoreWeave.
Potential downside targets for the Nikkei Average include ¥62,700, around the low recorded on 14 September; ¥61,000, around the 200-day moving average as of the previous day; and ¥60,000, a psychological support level. On the other hand, if the index can recover to the ¥67,000 range within a few days, it could again break above the upper boundary of the Ichimoku cloud, which is expected to ease downside concerns.
Key points to watch in the earnings reports of major US technology companies, which will gather pace from next week, include AI demand and capital expenditure plans, the balance between capital expenditure and earnings growth, changes in free cash flow, the structure of cyclical investment in AI-related revenue, methods of financing AI infrastructure investment, and credit risk trends following the earnings announcements.
One analysis holds that the uptrend since last year remains within an upward-trending channel. Although daily movements are being influenced by high-priced stocks, the market is considered to remain on a long-term upward trend.