Confusion is expected to persist in the short term, while the medium-term market remains in a vacuum with sentiment unclear. The view being reported is that President Trump's midterm-election shock could become a turning point for the market's future direction.
In the short term, the market's direction remains difficult to read, and it is unclear whether sentiment is bullish or bearish. Traders themselves are also unable to grasp the market's movements, and activity that shifts the trading range has been conspicuous. At times, the market also breaks out of its range, while algorithmic short-term trading has jolted the market.
The Nikkei average has fluctuated by as much as several thousand yen. Although a recovery to the ¥70,000 level is coming into view, sharp reversals and rebounds have occurred frequently. The influence of so-called market tinkerers is strong, making it difficult to predict when and how far the market will move.
The medium term is a period heavily influenced by themes, with Nvidia, AI-related stocks and semiconductor-related stocks often at the center. Such medium-term themes are currently lacking, and the market is viewed as being in a vacuum.
Over the long term, the focus will be on whether the Trump midterm-election shock becomes a turning point for sentiment. While the market may be buffeted in the short term, the medium- and long-term outlook could change depending on the prevailing themes.