Expectations for an early rate hike rose after US CPI accelerated beyond expectations, putting Nikkei futures on a downward trend. While buying is expected to move toward domestic-demand and defensive stocks, semiconductor-related stocks are likely to remain in a wait-and-see mode until a bottom is confirmed.
A market commentary in the 8 a.m. hour said the Japanese market was expected to open under selling pressure after the Dow Jones Industrial Average edged lower and the Nasdaq fell sharply in the previous day’s US session, weighed down by higher crude oil prices and the rise in US CPI. Chicago Nikkei futures were sharply lower than Osaka futures, and downward pressure on the Nikkei 225 was expected to intensify.
A wait-and-see stance toward a rebound in semiconductor stocks was expected to dominate. Cautious trading was anticipated in high-index-impact issues such as Advantest, Kioxia HD, SoftBank Group and Tokyo Electron. At the same time, some expected funds to rotate back into domestic-demand and defensive stocks.
Individual issue selection based on earnings was expected to stand out. QPSHD, Poeck, FIXER, Yamazawa, ELEMENTS, Toyo Denki, GDEP Advance, Media Do, Cave, JESCO HD, Ryohin Keikaku and EJ HD, which announced earnings last night, were reported as stocks likely to attract attention.