Japanese stocks are expected to remain driven by the direction of Japan-U.S. interest rates and fluctuations in long-term yields from 31 August to 4 September, while the AI sector's strength and growth expectations are seen supporting the market. The market is considered vulnerable to disruption ahead of the G20 finance ministers and central bank governors' meeting and the release of ISM-related data.
Japanese stocks in the first week of September are expected to be driven by the direction of monetary policy in Japan and the United States and by movements in long-term interest rates, with heightened volatility a concern. Strong earnings and growth expectations in the AI sector are cited as factors that could provide downside support for the market.
Statements by central bank leaders before and after the G20 finance ministers and central bank governors' meeting, to be held from 31 August to 1 September, could influence the direction of interest rates. This could alter market pricing for a September U.S. rate hike and affect Japanese stocks as well.
In the United States, the ISM manufacturing and non-manufacturing indices, the employment report and other data affecting monetary policy are expected to be released in succession from 1 to 4 September, with many potential sources of market disruption.
Meanwhile, Japanese corporate earnings remain solid. In particular, NVIDIA's forecast for a 70% increase in fiscal 2028 revenue supports the AI-related stocks' medium- to long-term growth potential, and TOPIX rose 2.0% in the fourth week of August.