Tokyo Stock Exchange Forecasted to Decline This Week
According to market sources, Tokyo stocks are expected to struggle this week due to hesitancy from investors in light of uncertainty surrounding corporate earnings following the recent strengthening of the yen.
The market is anticipated to experience nervous movements as speculation over the Bank of Japan’s monetary policy looms over traders.
Last week concluded with the key Nikkei 225 stock average plummeting by 1,123.65 points, marking a 3.36% decrease to close at 32,307.86 on the previous Friday.
Tokyo stocks were particularly weighed down by the strengthening of the yen against the dollar early last week, which was reflective of declining U.S. interest rates. Despite U.S. Treasury yields making a recovery later in the week, Wall Street suffered the consequences, which in turn negatively impacted the Tokyo market.
Although there was a notable rebound in the Nikkei on Wednesday, the gains were largely lost the following day. By Friday, heavy selling ensued as a result of the yen’s sharp spike, which was attributed to heightened speculation that the BOJ may prematurely lift its negative interest rate policy.
Amidst the volatility, trading was unpredictable ahead of Friday’s special quotation fixing to settle December stock index futures and options contracts.
Looking ahead to next week, analysts and brokers anticipate the Nikkei to fluctuate mainly between 31,500 and 33,000.
The failure to surpass its year-to-date closing high of 33,753.33, coupled with its downward movement this week, has caused the benchmark average to appear top-heavy.
An official at a bank-affiliated securities firm noted, “The takeoff has failed, and the market needs to regain its footing before testing its upside again.”
Despite some issues now being reasonably priced after experiencing declines this week, investors remain wary of purchasing on the dip due to exchange rate fluctuations, as stated by an official of a midsize securities firm.
