With the U.S. FOMC's rate hike and the Bank of Japan's additional rate hike now known, Japanese stocks after Silver Week are expected to be influenced next week by oil prices and events in Japan and the United States. The article lays out the specific developments and their chronology.
In the United States, the FOMC decided to raise rates by 0.25% and released a dot plot showing its outlook for future rate hikes. The Federal Reserve chair pointed to the continued persistence of inflation and suggested that additional rate hikes remain possible. As a result, the impact of higher rates is likely to remain a focus, particularly for stocks related to AI data centers, while some views suggest that AI security stocks and other areas could provide a countervailing factor against moves to curb massive investment in AI.
In Japan, the Bank of Japan implemented an additional 0.25% rate hike at its Monetary Policy Meeting. The yen's appreciation trend is expected to moderate temporarily because of the Japan-U.S. interest-rate differential, which some see as a tailwind for Japanese stocks. As the Japanese market will be closed for part of next week for Silver Week, movements in U.S. stocks and oil prices are expected to influence trading in Japan.
Oil prices will remain an important factor next week. WTI crude oil futures are trading around $100, and the direction of U.S. stocks could shift between a rebound and a correction depending on developments in the Middle East, which could drive oil prices higher. Japan's market faces U.S.-China summit meetings on the 23rd and 24th, but many observers believe they are unlikely to have a major direct impact on stock prices under current conditions.