In next week’s Tokyo market, the Nikkei Average is expected to break upward out of its triangle consolidation, bringing a reclaiming of the range ceiling at 70,000 into view. Attention is also focusing on signs of recovery in semiconductor and high-tech stocks, as well as developments related to the Bank of Japan.
Looking ahead to next week, the Nikkei Average is seen as having the potential to break through the upper end of its previous range, with the expected range indicated at ¥67,500 to ¥70,000. An upside breakout from the triangle consolidation is expected to provide a catalyst for accelerating the broader index’s advance.
Signs of a recovery in the semiconductor and technology sectors are strengthening, and the view is spreading that semiconductor exports from East Asia have passed the peak of their inventory adjustment. This has led to growing market expectations that the downside for major stocks will firm.
From a supply-and-demand perspective, some market participants expect funds to be more likely to flow into Japan next week as Asian markets close one after another. Depending on Bank of Japan-related announcements and the outcome of policy dialogue, interpretations of the prospects for an interest-rate hike may shift.