In the Tokyo stock market on 16 October, the Nikkei Average is expected to have a strong chance of staging a technical rebound, with buying back US semiconductor stocks expected to gain the upper hand as their declines ease. The factors behind the previous day's sharp decline and the expected range will be reviewed. Catalysts testing market resilience are also falling into place.
In the Tokyo stock market on 16 October, the Nikkei Average is expected to have a strong chance of rebounding, with the expected range set at ¥65,000–¥66,000. Given the previous day's sharp decline, the market is expected to open higher, with the sustainability of the rebound becoming the focus. Domestic-demand and defensive stocks are expected to attract an outsized share of buying, while signs that the market has bottomed may also provide support.
The key will be whether the decline in US semiconductor stocks, which contributed to the previous day's sharp market drop, subsides. After the sharp falls in CoreWeave's bonds and share price, the company's stock temporarily showed signs of recouping its losses, while comments by NVIDIA CEO Huang regarding the company's financial condition were also cited as a supportive factor. The SOX Index was down 0.88% toward the end of the session, with morning selling shifting to a more restrained decline in the afternoon session.
As for the schedule and international factors, FRB Chair Warsh is scheduled to speak at the IMF Annual Meetings, which could increase market volatility. In Japan, BOJ Governor Ueda (植田) is scheduled to address the National Credit Cooperative Convention, while overseas, the release of European inflation-related indicators and US price and production statistics is pending.