Next week is set to be packed with events, with stock-specific buying expected to intensify in response to earnings from major companies. The performance of AI and semiconductor-related stocks, as well as policy events in Japan, the U.S. and Europe, will be the market's focus.
AI and semiconductor-related stocks led a widening of losses in the latter half of the week, with the Nikkei approaching its low for the week toward the weekend. A sharp drop in CoreWeave and rising crude oil prices weighed on the market, while the U.S. market at times saw steep declines in the Dow and Nasdaq. Semiconductor stocks are expected to remain volatile into the following week. In Japan, earnings announcements are scheduled from semiconductor-related companies including Shin-Etsu Chemical, Advantest, Renesas Electronics, Ibiden and Tokyo Electron.
Monetary policy events in the U.S., Europe and Japan are concentrated next week. While the FOMC, ECB and Bank of Japan are expected to leave policy rates unchanged, the possibility of a rate hike at the next meetings, as well as developments in the Middle East and crude oil prices, are expected to be key market factors. Some observers believe that the performance of AI-related stocks could affect the broader market depending on developments following the U.S. midterm elections. Earnings announcements will expand from U.S. companies to domestic companies, and the market may focus on whether there are earnings surprises and on EPS trends.
Earnings for the July-September quarter are also gathering pace in Japan, with stock-specific buying expected to intensify, particularly in semiconductor stocks. Following Fanuc's earnings announcement, its full-year forecast was revised to a level above the market consensus, prompting a positive reaction at times. However, share prices are influenced not only by earnings figures but also by the performance of major AI-related stocks and investment plans. Amid the accelerating earnings season, investors are likely to watch the performance of individual stocks closely.
In addition to monetary policy events in Japan, the U.S. and Europe, next week will include the Bank of Japan's release of its Outlook for Economic Activity and Prices and the publication of economic indicators from various countries. The market is expected to remain in a difficult phase for establishing a direction as multiple factors interact, and trading may be driven more by individual companies' earnings, financial indicators and supply-demand dynamics than by investment judgments.