Next week's market is expected to be driven by the FOMC, the BOJ meeting and AI-related earnings, which will determine the direction of the Nikkei average. Concern over the profitability of AI investment and earnings announcements from major companies will be the focus.
The Nikkei average fell 4.03% in the previous week, down ¥2,631 and sold down to its lowest level in three months. Individual stocks also frequently posted steep declines, and caution toward AI-related stocks has intensified.
Concern over the profitability of AI investment has become the market's focus. As investors assess growth expectations and the timing of monetisation, the earnings outlook for AI data-center investment is being called into question.
Three key factors are expected to drive the market next week: the FOMC and interest-rate trends in Japan and the U.S.; earnings from Microsoft, Alphabet and Amazon; and the BOJ meeting and earnings trends among Japanese companies.
As an investment strategy, the article advises against overreacting during a sharp decline, prioritising confirmation of actual performance data and waiting for evidence of AI monetisation in earnings, while basing decisions on long-term fundamentals.