Buying is expected to lead on gains in U.S. AI-related stocks during the holiday and yen depreciation, but uncertainty over the situation in the Middle East is expected to weigh on the market and cap the Nikkei Average’s upside. The projected range for the Nikkei 225 today is ¥65,000–¥67,000.
In U.S. markets on the 23rd, semiconductor-related and AI-related stocks attracted buying, and the yen’s depreciation also supported sentiment. However, selling prompted by rising long-term interest rates caused major stock indexes to fall. Remarks suggesting that the U.S. Federal Reserve may continue raising interest rates also fueled bond selling. Against this backdrop, buying is expected to lead in Tokyo as the market reflects the previous day’s U.S. market trends, but the uncertain outlook for the situation in the Middle East is likely to weigh on the market and limit the upside.
Nikkei 225 futures in the night session were reportedly at times above the ¥67,000 level, which could support confidence in buying in the cash market. However, movements in crude oil prices, rising U.S. long-term interest rates and the possibility that these issues will be placed on the agenda of the U.S.-China summit scheduled for the 24th are expected to heighten market caution and bring buying to an end.
In today’s Tokyo market, psychological levels of ¥67,000, ¥68,000, ¥69,000 and ¥70,000 are cited as potential upside targets for the Nikkei Average. Potential downside levels include ¥65,000, ¥64,011, ¥63,000 and ¥62,726. In the short term, uncertainty over the situation in the Middle East, movements in oil prices and trends in U.S. long-term interest rates may also strengthen a wait-and-see stance.