The Nikkei Stock Average rebounded for the first time in 3 sessions, closing at ¥65,270. The yen has appreciated against the dollar since the start of September, and the view that the bar set by the market for the Bank of Japan's pace of rate hikes has risen is gaining ground.
The Nikkei Stock Average rebounded for the first time in 3 sessions, ending at ¥65,270, up ¥128 from the previous day. Although the market opened lower in the morning, buying back of AI and semiconductor-related stocks spread toward the close, with approximately half of the stocks in the TSE Prime Market rising.
Attention is focused on the yen's outlook. Three factors are cited behind the yen's rapid appreciation against the dollar since the start of September: the stance of Japanese and US authorities, rising expectations for Bank of Japan rate hikes, and speculation that the Government Pension Investment Fund (GPIF) will expand its domestic investments.
In particular, remarks by Treasury Secretary Scott Bessent have attracted market attention, with some viewing them as signaling a stance of restraining yen-selling. This is thought to have prompted the unwinding of yen-short positions. Meanwhile, factors supporting yen-selling, including a widening trade deficit caused by higher crude oil prices, remain in place. There are also concerns that the yen could weaken again if the market's pricing of the Bank of Japan's pace of rate hikes leads it to be viewed as dovish.