Draft budget requests for the next fiscal year are expected to be finalized on the 31st, with the market focused on their size. The US August employment report is also due this week.
The Nikkei 225 was subdued last week, with a wait-and-see mood prevailing ahead of and around the Jackson Hole meeting over the weekend.
The US August employment report is scheduled for release on the 4th of next month. A strong result could strengthen expectations that the Federal Reserve will raise interest rates, analysts say.
In Japan, draft budget requests for the next fiscal year are expected to be finalized on the 31st. If the requests are in line with expectations or particularly large, long-term interest rates could rise amid fiscal concerns and speculation about increased government bond issuance. The view is that this could make the high valuations of Japanese equities, including the Nikkei 225, particularly technology, AI and semiconductor-related stocks, more likely to come under scrutiny.