Strong U.S. PMI data pushed up long-term interest rates. With the Bank of Japan maintaining its rate-hike policy and oil prices continuing to rise, Japanese stocks are expected to remain in a long-term downtrend. Value stocks with low P/E and P/B ratios, along with drone and autonomous-driving stocks, are attracting attention.
September U.S. PMI came in at a strong 57.0 for manufacturing and 58.7 for services, exceeding market expectations, while the input price index, which indicates raw material costs, also remained high. This pushed up long-term U.S. interest rates and capped the upside for U.S. stocks.
At its September FOMC meeting, the Federal Reserve raised the federal funds rate to 3.75–4.0% and revised its year-end 2026 forecast up to 4.1%. The possibility of additional rate hikes in October or December has been raised, and the Fed is expected to maintain its hawkish stance.
In Japan, the Bank of Japan raised its policy rate from approximately 1.0% to approximately 1.25% and continued its policy of monetary tightening. As tensions in the Middle East pushed up oil prices and increased the risk of higher inflation, the Bank of Japan is also expected to adjust policy in response to economic and price developments. November crude oil futures ended at $92.16, and expectations for higher interest rates in both Japan and the U.S. are unlikely to weaken quickly.
The Nikkei Average remains in a long-term downtrend, closing at ¥65,513.99 on 24 September. Drone and autonomous-driving stocks, along with value stocks with low P/E and P/B ratios, have been identified as key themes, with the focus mainly on stocks that appear to have limited downside based on their moving-average patterns. The key question for the market is expected to be whether the index can close above its 75-day moving average.