With expectations for an early rate hike resurfacing in the US market, the Nikkei Average extended its gains modestly this week. Ahead of late-September rights capture, the market entered a phase in which interest in value stocks increased.
The Nikkei Average ended the week at ¥66,405.56, up 0.6% from the previous week’s close. AI and semiconductor stocks were sold early in the week as oil prices and long-term interest rates rose, but rebounded in the latter half. Ahead of NVIDIA’s earnings announcement, the trend in US markets prompted buybacks, while the spillover to domestic AI and semiconductor stocks was limited.
Expectations for an early rate hike resurfaced in the US. Following the Jackson Hole meeting, the probability of a September rate hike increased, and the possibility of a hike at the 15-16 September FOMC meeting is now being watched. Further rate hikes could be priced in depending on upcoming economic data, potentially creating headwinds for domestic technology stocks.
Some market participants also expect a seasonal tendency for US equities to perform worse in September. This was seen as a phase in which the relative appeal of value stocks, in anticipation of late-September rights capture, could be reassessed. NVIDIA’s share-price reaction was limited, and market movements could be determined by other companies’ earnings and overseas events.
In Japan, industrial production, corporate enterprise statistics and the household survey are due next week. Overseas, indicators including the ISM Manufacturing Index and employment data are expected to influence the market’s direction.
Attention is also expected to remain focused on trends in semiconductor and information software stocks, including Broadcom’s earnings, developments at related companies and the impact of Salesforce’s results.