Japanese stocks are expected to test a rebound this week, with expectations for corporate earnings at home and abroad. Meanwhile, doubts about the profitability of AI investment continue to simmer, and some market participants see the possibility of funds shifting into sectors outside AI and semiconductors.
The Nikkei Average is expected to seek a rebound in the third week of October, amid developments in US markets, while remaining on a downward trend from the previous week. Some market participants also expect funds to rotate into defensive and high-quality stocks.
Earnings announcements from Meta Platforms, Tesla and Lam Research in the US are due, while major Japanese companies will also begin reporting earnings, including DISCO on 22 October and FANUC on 23 October. Confirmation of a recovery in demand for AI-related stocks could improve market stability.
Expectations for solid corporate earnings are likely to support share prices this week, but concerns about excessive AI capital investment remain. Some market participants believe investment funds could shift into sectors outside AI and semiconductors.