The Nikkei Average closed at ¥65,018 in trading on 18 September as the BOJ implemented a rate hike. Next week, attention is expected to focus on movements in long-term US interest rates and AI-related stocks, as well as developments in the Middle East and oil prices.
In trading on 18 September, the Nikkei Average recovered to the ¥65,000 range for the first time in 6 trading days, closing at ¥65,018. The BOJ decided to raise its policy rate by 0.25 percentage points to 1.25%, but the market did not view the move as a major negative, and stock prices remained firm. Although long-term US interest rates rose at one point, Japanese stocks recovered, supported by yen depreciation and buybacks in AI- and semiconductor-related stocks.
With the Tokyo market closed from 21 to 23 September, movements in overseas markets are likely to have a greater impact on the Tokyo market next week. Continued AI demand and yen depreciation are expected to support stock prices, but the possibility that the US 10-year Treasury yield will again exceed 5% could also intensify selling pressure, particularly on AI- and semiconductor-related stocks. The outlook is that whether the index can hold the ¥65,000 range will be key.
Expectations for easing tensions in the Middle East and movements in oil prices are also cited as factors that could affect the market. Oil prices temporarily fell below $100, and if concerns about US inflation ease, upward pressure on US interest rates could weaken. However, if oil prices rise again, inflation and higher interest rates could become headwinds for the stock market.