The interplay between U.S. retail sales, the U.S. FOMC and the BOJ meeting is expected to be the focus of the markets next week and the week after. Expectations for a rate hike following the CPI report are likely to affect market sentiment, while investors will also need to watch the ex-dividend date and developments at the BOJ.
U.S. equities rose at the end of the week, with the Dow finishing up $509.19 from the previous day. The rise in the core August CPI exceeded market expectations, raising expectations that the FOMC would raise rates in September, while a slowdown in the rise in crude oil prices led to a modest improvement in market sentiment.
Monetary policy events are scheduled in both Japan and the United States next week, and the U.S. FOMC is widely expected to raise rates at its 15th-16th meeting. Meanwhile, an additional rate hike at the BOJ meeting, the first in 3 months, is considered all but certain. Continued rate hikes to 1.75% are anticipated, which is also expected to affect the yen.
Even if the United States holds off on a rate hike, concerns about future increases will remain. Market attention is likely to focus on the U.S. political situation and views on the Federal Reserve's independence. September is known as a month of weak performance, and developments will be watched as the market approaches a potential rebound in stock prices from the following week onward.
The 28th is the final trading day with dividend rights, and dividend-reinvestment buying is expected to emerge on the 29th. In addition, reports that Chinese President Xi Jinping will visit the United States on 24 September have emerged, which could further draw market attention to developments in U.S.-China relations.