US employment trends, rising long-term interest rates, opinions from the Bank of Japan meeting and oil price movements were cited as key market factors for this week, while views spread that expectations of US rate hikes and rising interest rates would weigh on share prices.
Last week, major stock indexes lacked a clear direction. Strong US economic conditions were viewed positively, while rising long-term interest rates weighed on the market. AI-related developments were also seen as a factor capable of influencing investor sentiment. Crude oil futures fell below $100, at times providing support for share prices.
US long-term interest rates rose sharply in the latter half of the week, briefly reaching 5.23% on the 24th. Rising long-term interest rates in Japan and the US became a focus for the market, and some observers pointed to the possibility that elevated US long-term interest rates could influence the market's next phase. Japan's long-term interest rates also rose, briefly reaching 3.13% on the 25th, their highest level in about 29 years.
Attention also focused on the key opinions related to the Bank of Japan's monetary policy meeting. At the 17-18 September meeting, the BOJ raised its policy rate by 0.25%, with the vote 7-2. Market participants focused on the views of those favoring no change and whether a substantial rate hike had been considered. The BOJ's upcoming statement and the issue of yen depreciation were also viewed as market factors.
This week, the US PCE deflator for August, the ISM manufacturing index and employment data are due to be released. If they suggest that economic conditions remain strong, they could accelerate movements in long-term interest rates. In the oil market, developments in the Middle East will again be a focus, and movements in WTI could affect the equity market. Views on AI remain mixed, with both positive and negative opinions continuing to coexist.