US markets rose as expectations for an additional rate hike receded, with buying concentrated in semiconductor and AI-related stocks, including the SOX Index. The Japanese market is expected to develop around the Nikkei Average's reaction while assessing developments in the US.
US markets rose on the 2nd, with the major stock indexes advancing. The Dow rose $250.40 to $51,176.96, while the Nasdaq Composite gained 319.26 points to 27,190.86 points. The market strengthened its expectation that the US Federal Open Market Committee would leave its policy rate unchanged in October, and buying prevailed. The SOX Index rose sharply by 2.4%.
In the Tokyo market on the 5th, profit-taking emerged following the previous day's rally, while position-adjustment selling ahead of the US employment report also weighed on prices, causing the Nikkei Average to fall for the first time in 3 sessions. The Nikkei held above its 75-day moving average, and expectations are likely to grow for a continued uptrend following an upside break through the resistance zone. Futures in the night session are also seen potentially recovering to the ¥70,000 level.
Although expectations for an additional US rate hike have receded, long-term yields remain elevated in the 5.2% range, so caution is warranted regarding future interest-rate movements. Meanwhile, the G7's decision to coordinate the release of oil reserves could have a positive effect on the investment environment, and the prime minister is expected to deliver a policy address at an extraordinary session of the Diet on the 5th. Indicative upside levels include ¥71,000, ¥71,692 and ¥72,000, while downside levels include ¥69,000, ¥68,000, ¥67,000 and the 75-day moving average at ¥66,764.