The Nikkei 225 is expected to trade in a range near its lows in the afternoon, after widening its morning losses. With uncertainty over the Middle East continuing, crude oil prices and long-term interest rates are the focus.
The Nikkei 225 is expected to trade in a range near its lows in afternoon trading, with its decline widening to the ¥600 range after a sharp fall at the morning opening. Some have pointed to stronger investor interest in stocks with strong earnings, as the period of increasing announcements of interim results for August approaches. Inflation concerns caused by higher US crude oil prices and rising bond yields became selling factors, but crude oil prices turned lower toward the end of the session, while slowing growth in long-term interest rates attracted attention.
Although uncertainty over the outlook for the Middle East persists, some believe that the decline in crude oil futures prices in overseas markets could provide reassurance to equity markets. An increase in earnings announcements could boost investor interest and provide support for the Nikkei 225.
In the US market, inflation concerns caused by higher crude oil prices and rising bond yields became selling factors, while in the domestic market, the decline in crude oil prices and strong demand at the domestic 10-year bond auction slowed the rise in long-term interest rates. Crude oil prices and interest rates remain the focus for the market outlook.