[Analysis of the Nikkei Stock Average] Markets may remain jittery over Middle East developments; moves by the US and Japanese central banks also in focus (LIMO)

The Nikkei Stock Average closed at ¥64,011.34 in Tokyo trading on 11 September, down ¥1,259.61 from the previous day and near its lowest level in approximately one month. Japanese equities were sold following the decline in US markets the previous day, amid speculation that risks surrounding the Middle East are rising again. Reports that fighting between the United States and Iran may not end until after the US midterm elections in November, along with reports that Iran had resumed production of ballistic missiles, drove crude oil prices higher.

Long-term US Treasury yields remained high amid persistently elevated crude oil prices and concerns about inflation in the United States. Japanese long-term yields also rose at one point to near the key 3% level. Declines in semiconductor-related stocks added to the market's weakness, with shares of Advantest and SoftBank Group among those sold.

The focus for markets this week is expected to be developments at the US and Japanese central banks. The Federal Open Market Committee (FOMC) is scheduled to meet on the 15th and 16th, followed by the Bank of Japan's monetary policy meeting on the 17th and 18th. Expectations of a US rate hike are increasing, while reports indicate that the Bank of Japan is expected to pursue a policy of raising its policy rate. Attention is also likely to focus on the press conferences by Fed Chair Waller (ウォーシュ) and Bank of Japan Governor Kazuo Ueda (植田和男) following the meetings.

Reports are also expected this week on a meeting of foreign ministers from the Gulf states and Iran, and there is information that concerns over energy supplies have eased. Markets may therefore adopt a wait-and-see stance.