The Nikkei 225 rose in the afternoon session on 6 May following reports concerning the end of hostilities between the United States and Iran. It approached ¥63,000 on 7 May, and a Nomura Securities strategist explained the impact of a ceasefire agreement.
Following reports concerning a memorandum aimed at ending hostilities between the United States and Iran, US stocks rose, with both the S&P 500 and Nasdaq updating their all-time highs. In trading on 7 May, Japan’s Nikkei 225 rose ¥3,320.72 from the previous business day to ¥62,833.84, updating its record high.
Nomura Securities indicated that stock prices have tended to rise from 3–4 weeks before a ceasefire agreement and have continued to rise through the day of the ceasefire in past cases. It said that temporary profit-taking is likely to emerge after a ceasefire. On earnings, many companies are expected to post higher ordinary profit, while USD/JPY is projected at around ¥151 and EUR/JPY at around ¥180.
For the domestic outlook, a renewed expansion in PER is anticipated depending on the growth strategy from June onward. An upside scenario was presented in which the Nikkei 225 reaches ¥67,500 and the TOPIX reaches 4,500 as ceiling price levels. The firm said higher crude oil prices and the impact of growth investment could affect earnings going forward.