Japanese equities traded just before Silver Week with the Nikkei Average again focused on levels around ¥65,000 following last week's decline. The market is expected to move this week depending on the outcomes of the U.S. FOMC and the Bank of Japan's monetary policy meeting.
The Nikkei Average ended last week at ¥64,011, down ¥1,009 from the previous weekend's ¥65,020, marking a weekly decline of more than ¥1,000 for the second consecutive week. Higher crude oil prices, rising interest rates and a stronger yen, driven by concerns over the situation in the Middle East, weighed on the market.
The market also saw some buying back, with funds flowing into AI and semiconductor-related stocks expected to deliver growth, financial stocks benefiting from rising interest rates, and resource and shipping stocks that stand to benefit from higher oil prices. Although the Nikkei Average remained in the ¥65,000 range, it continued to test lower levels.
The U.S. FOMC and the Bank of Japan's monetary policy meeting will be the focus this week. At the FOMC, the possibility of a rate hike and the outlook for monetary policy will be the market's focus, and the initial reaction is expected to vary depending on the outcome. At the Bank of Japan meeting, attention will center on the pace of future rate hikes.
The Nikkei Average is expected to move around the ¥65,000 level, with the late-May low and the area around the 200-day moving average potentially serving as downside support. On the other hand, buying back may accelerate if positive news emerges.