As concerns grow that the Nikkei 225 could fall below ¥66,329 by the end of this week, it declined last week, led by AI and semiconductor stocks, amid the situation in the Middle East and rising long-term interest rates in Japan and the United States.
The Nikkei 225 ended last week at ¥66,016, down ¥2,697 from the previous Friday. Although it remained in the ¥69,000 range on the 17th, it at one point plunged into the ¥65,000 range on the 18th and 19th. The index recovered somewhat toward the end of the week, but the rebound lacked strength. Selling was particularly pronounced in AI and semiconductor-related stocks, as tensions in the Middle East and rising long-term interest rates in Japan and the United States weighed on sentiment.
The recovery toward the end of the week was reportedly influenced temporarily by measures taken by the U.S. Treasury to curb the rise in long-term interest rates. However, the decline in the 10-year Treasury yield was temporary, and the market did not achieve a full-scale rebound. In the Nikkei 225 contribution ranking, AI and semiconductor-related stocks including Tokyo Electron, SoftBank Group, Advantest and Ibiden were among the biggest negative contributors. Across the market, declining stocks outnumbered advancing stocks, and negative contributions were larger.
Technically, the index has been unable to clear the hurdle posed by its downside support line on a daily-chart basis, although this does not mean that downside risks have become more pronounced. A dead-cross signal, in which the 25-day moving average falls below the 75-day moving average, has nevertheless been identified as a negative sign. This week, the market is expected to seek stability between the upper end near ¥70,000 and the lower end near ¥60,000.