The Nikkei 225 continues to seek a foothold in the ¥70,000 range. This week, earnings from ASML and TSMC, major US financial institutions and key economic data releases will be crucial for the market.
In the Japanese stock market last week, the Nikkei 225 traded in the ¥69,000 range and closed higher than the previous Friday, although price movements were volatile and the market continued trying to return to the ¥70,000 range. The index rose further at the start of the week and at times recovered to the ¥70,000 range, but selling toward the weekend capped gains. With buying emerging at lower levels, the market can be seen as maintaining its firmness.
ASML Holding of the Netherlands and Taiwan Semiconductor Manufacturing Company (TSMC) are scheduled to announce their results this week, drawing attention to whether their earnings will provide a catalyst for the market. Depending on the reaction of US stocks and interest-rate movements, negative surprises could heighten the market's sensitivity, making the presence or absence of earnings surprises at the two companies a key focus.
Results from major US financial institutions are also due. Investors will focus on the impact of persistently high interest rates on the market, lending trends and movements in delinquency rates. US CPI and PPI, retail sales, the Beige Book and other economic data are also due, and the tug-of-war between interest rates and corporate earnings is expected to be a factor determining the direction of share prices.
Technical indicators have put the Nikkei 225's PER and EPS trends in focus. Ahead of the full-scale earnings season, the possibility of the index reaching the ¥70,000 range will again be tested depending on any upside revisions to earnings outlooks.