The Nikkei 225 is expected to trade in a range of ¥67,000 to ¥70,000 next week. Buying interest in AI and semiconductor-related stocks is expected to continue, although caution over overheating is also increasing.
The Nikkei 225 rose this week, closing at ¥68,309.46 on 28 September. Rising long-term U.S. Treasury yields, higher oil prices and uncertainty surrounding oil and the Middle East weighed on the market, which at one point fell below ¥65,000 toward the end of September. On 30 September, developments at OpenAI, including the announcement of its AI agent “dots,” provided a cue for the market, driving activity in SoftBank Group and lifting the Nikkei. In addition, following strong earnings from U.S. Micron Technology, funds flowed into AI and semiconductor-related stocks, with shares of companies including Kioxia Holdings and Advantest rising sharply on 1 October. Although profit-taking emerged on the 2nd in response to the sharp gains, buying on dips remained firm.
Looking ahead to next week, a buy-on-dips stance is expected to remain effective even as caution over overheating grows. Following the positive market reaction to Micron’s earnings, buying interest in AI and semiconductor-related stocks could return, with funds expected to flow readily into index-heavy stocks. At the same time, the Nikkei 225 has risen in the short term to near the +3σ level of its Bollinger Bands, requiring attention to downside risks during a potential correction. A short-term shift of funds into economically sensitive and consumer-related stocks is also anticipated, and the performance of stocks in focus and earnings announcements are expected to be the market’s main focal points next week.
Key events this week include the release of the U.S. ISM Services Index, the minutes of the FOMC meeting and the University of Michigan Consumer Sentiment Index. MonotaRO, SWCC and Mitsui O.S.K. Lines are highlighted as stocks to watch next week, and individual stock movements are expected to have an especially strong influence on the market’s direction. The performance of the week’s top percentage gainers and biggest percentage decliners will also warrant attention as potential market catalysts for next week.