The Nikkei Average is expected to trade around ¥67,000. Rising oil prices and movements in US long-term interest rates are expected to weigh on investor sentiment, while stock picking among earnings-reporting stocks and buying of semiconductor stocks are seen supporting the market.
The Nikkei Average is expected to trade around ¥67,000 in the afternoon session, with profit-taking likely to emerge following the sharp gain the previous day.
Oil prices have risen as negotiations with Iran over the Strait of Hormuz have stalled. Together with rising US long-term interest rates, this is expected to affect market sentiment.
Meanwhile, buying of semiconductor stocks remains strong, while stock picking based on earnings is expected to continue supporting the broader market.
Funds are flowing into the mining and banking sectors, which benefit from higher oil prices, and the broadening of stock selection may help keep the index firm.