TOKYO (Archyde.com) – The Tokyo stock market is expected to consolidate this week. The US price index has fallen below market expectations, and the excessive cautiousness regarding monetary tightening has eased. On the other hand, a feeling of overheating is also conscious. With the closing cycle of the financial results running out, there will be a shortage of immediate ingredients, and it seems likely that the price will be limited in pursuit of higher prices.
The expected range for the Nikkei Stock Average is 28,000-29,000 yen.
Koji Toda, fund manager at Resona Asset Management, said, “There is no particular reason to sell Japanese stocks due to specific factors, and if the US market is calm, it will be solid.” Although futures-led fluctuations are possible in the short term, prices are expected to consolidate at the 28,000 yen level.
Awareness of the peaking out of US inflation will support the market. The minutes of the FOMC meeting (July 26-27) will be released on the 17th, but several senior Fed officials have repeatedly said that future interest rate hikes “depend on data,” and “there seems to be no particular hawkish factor.” (Shingo Ide Chief Equity Strategist at NLI Research Institute).
With regards to rice prices, the release of a series of housing-related indicators is drawing interest. If the slowdown in the housing market is reconfirmed, “it is likely to lead to speculation that rents will fall,” said Mr. Ide.
Domestic corporate earnings are not as bad as expected (Domestic Securities). Focusing on high-performing stocks, the firmness of the lower price is conscious. The Nikkei Stock Average is said to have “technically softened” (domestic securities) by surpassing the highs of March and June, which had been resistance so far.
On the other hand, volume and materials are needed to break above 29,000 yen, and it is believed that the short-term uptrend will be limited. The rise-and-fall ratio of the Tokyo Stock Exchange prime market is currently at a high level of regarding 130%, and it seems that the speed adjustment accompanying the sense of overheating is also likely to be cautious.
Inflation in the US remains at a high level, and concerns over the pace of interest rate hikes following September and the outlook for the economy continue to linger. After the US CPI announcement, US interest rates declined and stock prices were favorable, but as several Fed officials indicated their intention to continue raising interest rates to curb inflation, US interest rates rose once more, and there was a scene where the top of stock prices was suppressed. there were.
It is possible that the current stock market is overly optimistic, and even in the minutes of the FOMC meeting, “If there are unforeseen hawkish factors, it is easy to fall back,” said Mr. Ide of the Nissei Research Institute.
US economic indicators are scheduled to release July retail sales (17th) and July industrial production (16th). In Japan, April-June real GDP will be announced (15th, first preliminary report), and in China, July retail sales and industrial production will be announced (15th).
