Summit meetings among national leaders are scheduled to coincide with the UN General Assembly during the week of 21-25 September, which is likely to ease concerns about a deterioration in the situation in the Middle East. Yen selling is likely as markets focus on the US-Japan interest-rate differential, but downside is expected to be limited by concerns over foreign-exchange intervention. Trading will be limited to 24 and 25 September, or 2 days, because of the extended holiday period.
Summit meetings among national leaders are scheduled to coincide with the UN General Assembly during the week of 21-25 September, and concerns about a further deterioration in the situation in the Middle East are expected to ease. Yen selling is likely in the foreign-exchange market as investors focus on the US-Japan interest-rate differential, but the yen's downside is seen as limited amid concerns over foreign-exchange intervention by the monetary authorities. Ahead of the extended holiday period, the stock market is expected to trade for only 2 days, on 24 and 25 September, and funds are seen as likely to flow into AI-related stocks. Against this backdrop, the Nikkei 225 is expected to remain firm.
Meanwhile, the Weekly Market Outlook points to a focus on market resilience as markets move past central-bank week, with the Bank of Japan's monetary policy and crude oil prices cited as factors that could cap gains. In the yen market, the prospect of intervention at levels in the ¥160 range and the merits of the Bank of Japan effect have been identified as key market focuses, and future foreign-exchange trends could affect the direction of the stock market.