The Nikkei 225 ended trading last week at ¥62,693.16, down 4.0% from the previous weekend's close, weighed down by volatility in AI-related stocks and falling crude oil futures. This week brings numerous monetary policy and earnings events in Japan, the US and Europe, while the US midterm elections are also approaching, and activity in individual stocks is expected to increase.
Japanese stocks fell last week, with the Nikkei 225 ending at ¥62,693.16, down ¥2,631.13 (-4.0%) from the previous weekend's close. Against a backdrop of continued uncertainty in the external environment, movements in AI-related stocks and fluctuations in crude oil futures affected market sentiment.
At the start of the week, a sharp fall in US CoreWeave shares and renewed concerns over excessive AI investment prompted selling, compounded by falling oil prices. However, the decline eased at times from the lows. Midweek, strong earnings from US SpaceX spilled over into Japanese AI and semiconductor-related stocks.
In the latter half of the week, declines widened, led by AI and semiconductor-related stocks. An after-hours fall in Lam Research and Meta's move into the red heightened caution over AI investment, while the Nikkei 225 attempted to find a floor.
This week brings monetary policy events in Japan, the US and Europe. Earnings announcements by major US companies will be at their peak, while July-September earnings announcements will get into full swing in Japan. Depending on the outcome of the US midterm elections, momentum to curb AI development could increase, and the market is generally expected to remain directionless.