Emerging markets strengthened their risk-off stance this week amid inflation concerns and surging crude oil prices, while the Nikkei 225 continued to fall. With the record date for the September interim dividend approaching, reluctance to sell coexisted with stock-specific focus on individual catalysts.
Emerging markets trended lower this week, with the Nikkei 225 down 1.55% from the previous weekend, the Growth Market Index falling 3.38%, and Growth 250 declining 3.63%. The Growth Market Core Index, which comprises the largest stocks by market capitalization, also fell approximately 4.73%. Renewed instability in the Middle East drove crude oil prices higher, intensifying inflation concerns and spreading a risk-off mood.
Among the largest stocks by market capitalization, PowerX rebounded sharply, rising 17.99% from the previous weekend. Expectations for its battery storage power generation systems for data centers, along with speculation that higher crude oil prices would boost demand for energy storage facilities, provided support. Terra Drone rose 2.59% as buying continued on favorable reaction to its announcement of plans for mass production of interceptor drones. Meanwhile, Trial Holdings, the largest company on the Growth Market, fell 5.05% as investors took profits following its string of gains through last week.
KOMPEITO listed on the Growth Market this week as a new listing. Its opening price of ¥1,480 was below the ¥1,600 offering price and the ¥1,560–¥1,600 indicative price range, suggesting caution in the formation of the opening price from a supply-and-demand perspective. With the U.S. FOMC and the Bank of Japan monetary policy meeting scheduled for next week, expectations of interest-rate hikes are being priced into stock prices. Movements ahead of the record date and individual stocks with favorable catalysts are expected to draw particular attention.
Looking ahead to next week, market direction is expected to remain unclear through the end of Silver Week, with stocks that announce upward revisions to earnings or dividend forecasts likely to be the focus of investor interest. The tug-of-war between selling and buying around the record date may continue, as may developments in margin trading ahead of the 5-day holiday. Short-term trading is expected to be active, particularly in popular stocks that are not subject to margin-trading restrictions, while 6 IPOs are scheduled to list next week.