The Nikkei Average fell sharply last week, closing at ¥57,434, down ¥5,856. With events including the SQ settlement and margin call deadline ahead this week, the market is expected to see some short covering, although the possibility of a downtrend remains.
In the Japanese stock market last week, the Nikkei Average ended trading at ¥57,434, down ¥5,856 from the previous weekend's close, plunging well below the ¥60,000 level. The weekly decline was 9.25%, while the TOPIX and Growth Index also fell sharply.
This week, supply-and-demand events including the margin call deadline on the 10th and SQ settlement on the 13th are ahead, and stock prices may rebound. At the same time, attention is said to be necessary to downside risks amid concerns over tighter regulation of AI-related industries. Stocks scheduled to announce earnings, including SoftBank Group and CoreWeave, are also attracting attention.
Three possible market scenarios have been identified: a continued decline, short-term range-bound trading, and a rebound trend. The daily moving averages and Gann angles on the chart indicate that downward momentum is currently strong, although a potential starting point for short covering is also being watched.
Among economic indicators, inflation-related data from the US and China are scheduled to be released, and US interest-rate movements may affect stock prices. The yield spread between US Treasuries and high-yield bonds is widening, raising concerns that anxiety in credit markets could spread to equity markets.
At the same time, the Nikkei Average's P/E ratio has declined to around 14.68 times. If earnings forecasts remain unchanged, some view current levels as undervalued, although EPS forecasts could be lowered depending on regulatory developments affecting the AI market.