The Nikkei Average ended the week 1.55% below the previous week’s close. After reaching a high of ¥66,399.84 on Monday, it fell to ¥64,011.34 on Friday. The backdrop was rising crude oil prices and a renewed acceleration in inflation.
The Nikkei Average fell ¥1,009.60, or 1.55%, from its 4 September close of ¥65,020.94 to its 11 September close of ¥64,011.34. TOPIX also fell 1.83%, from 4,103.23 to 4,028.30, while the yen strengthened by approximately ¥2.08 against the dollar, from ¥156.295 to ¥154.220.
The weekly figures alone, however, can give a misleading picture. The Nikkei Average rose to ¥66,399.84 on 7 September before falling to ¥64,011.34 on the 11th. Measured from Monday’s close to Friday’s close, the decline was ¥2,388.50, or 3.60%. The S&P 500, NASDAQ and Dow Jones Industrial Average also fell over the week.
The backdrop was rising crude oil prices and a renewed acceleration in inflation. Brent crude rose from $102.24 on 4 September to $109.51 on the 9th. US PPI for August rose 5.4% year on year, while CPI rose 3.4%, with growth accelerating from July in both cases. Japan’s GDP was revised upward to an annualized real growth rate of 1.4% in the second preliminary estimate, while private consumption was flat and capital investment declined.
This week is expected to be concentrated with interest-rate events: the FOMC on 15–16 September, US retail sales on the 16th, the Bank of Japan meeting on 17–18 September, and Japan’s CPI on the 18th. The stated policy is not to rush into selling holdings solely because of index movements, provided the companies’ earnings are unaffected even if crude oil prices and interest rates continue to rise.