Japanese stocks are expected to rise after a 5-day holiday break, supported by a renewed rally in AI-related stocks, a weaker yen and lower oil prices. Meanwhile, selling pressure in the bond market could intensify amid uncertainty over Bank of Japan policy.
Japanese stocks are expected to open higher in trading after the holiday break. Global trends in AI-related stocks, along with the weaker yen and lower oil prices, are expected to support the market.
As of 5:30 p.m. on the 23rd, December Nikkei 225 futures on Osaka Exchange were trading at ¥66,760, about 2.6% above the Nikkei 225's closing level on the 18th. The yen was around ¥157.80 to the dollar. It rose temporarily after the Bank of Japan raised interest rates but has since failed to sustain its gains.
Views are spreading that gains in U.S. technology stocks will gather momentum again, and optimism toward AI-related stocks has revived following the popularity of Meta Platforms' new AI agent, "Muse." Gains in semiconductor-related stocks in the South Korean market could also spill over into Japanese semiconductor stocks.
While the weaker yen supports export-related stocks, some investors believe concern over possible foreign-exchange intervention by the government and authorities could make investors more cautious. Crude oil prices are expected to remain on a downward trend, with expectations of pipeline restarts and views on developments in the Middle East cited as contributing factors.