The Nikkei Average rose ¥850 from the previous day to ¥66,364 on the 25th, extending its winning streak to 5 days. The index gained ¥1,345 over just 2 trading days this week, recovering to the ¥66,000 range. With numerous events next week that could move interest rates, including the US employment report, the market is expected to face conditions in which a sense of a ceiling is likely to emerge.
The Nikkei Average rose ¥850 from the previous day to ¥66,364 on the 25th, extending its winning streak to 5 days. Although the market was influenced by movements in US long-term yields and the reaction of US stocks, gains widened from the opening, and the index continued to trade near its highs toward the close.
Financial and semiconductor stocks led the market. Against the backdrop of rising Japanese and US long-term yields, the 3 megabanks rose in the 3–4% range, while semiconductor stocks including Tokyo Electron and Advantest also attracted buying. SoftBank Group, meanwhile, fell 3.2% on concern over a decline in its subsidiary Arm, while Shimizu Corporation dropped more than 5% following its announcement of a convertible bond issue.
Although the market had fewer trading days this week because of Silver Week, buying of large-cap technology stocks advanced on the 24th after the market reopened, and a gain of more than ¥800 on the 25th left a broad range of stocks firm. With domestic indicators including the Bank of Japan's Tankan survey and the Tokyo metropolitan area CPI, as well as US indicators including the US employment report, due next week, the market is expected to face limited upside.
Next week's main schedule includes the release of the minutes of the Bank of Japan's Monetary Policy Meeting and the US employment report, with numerous developments that could affect Japanese and US interest rates. There may also be periods of stronger risk aversion. With views that profit-taking is likely after the 5-day winning streak, caution will be needed as the market watches interest-rate movements.