The Nikkei average has posted steep declines for two consecutive weeks, falling by more than ¥6,300. With U.S. and Japanese monetary policy meetings and earnings from AI- and semiconductor-related companies scheduled this week and next, attention is focused on the stock market's reaction.
The Nikkei average posted steep declines for two consecutive weeks last week, with the cumulative decline exceeding ¥6,300. Although the market could rebound near the 200-day moving average in the short term, the hurdle to further gains is high. This week will bring a series of important events, including U.S. and Japanese monetary policy meetings and earnings from AI- and semiconductor-related companies, with the focus on whether the market can hold the ¥60,000 level.
At the end of last week, the Nikkei average plunged after failing to hold the ¥65,000 level, and selling accelerated until it fell below the ¥62,000 range. It subsequently showed some signs of rebounding, but other indexes were also weak and overall market conditions remained soft. Concerns about AI investment, vigilance over cyberattacks and rising tensions in the Middle East are weighing on the market.
Earnings from Japanese and U.S. AI- and semiconductor-related companies, including Shin-Etsu Chemical, Advantest, Tokyo Electron and Kioxia Holdings, are scheduled as catalysts from next week onward. Depending on the market reaction to earnings from U.S. hyperscalers, opportunities for buying back stocks could emerge, although some market participants believe share prices have already priced in the results ahead of the announcements. The 26-week moving average has also begun to slope downward at times, and a return to a full-fledged uptrend is expected to require calmer price movements and an accumulation of buying and selling demand.
Events this week and next are likely to have a major influence on the market's direction, but for now the key question is whether the Nikkei average can hold the ¥60,000 level. Some market participants believe that, despite the large volume of information provided through television and charts, the market remains within the bounds of a rebound and it will be difficult to form a medium- to long-term trend.