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TOKYO (Jiji Press) — Tokyo stocks are expected to continue moving on a weak note this week, with investors remaining worried about tensions in the Middle East and rising U.S. interest rates, market sources said Friday.
Last week, the benchmark Nikkei 225 index dived 1,056.63 points, or 3.27%, to end at 31,259.36.
The Tokyo market took a heavy blow from strong U.S. economic indicators dampening expectations that the Federal Reserve would put an end to its interest rate hikes.
Growing concerns over the Israel-Hamas war and the possibility of the conflict expanding to other Arab countries also spurred risk-adverse trading.
This week, the Nikkei would move between 30,500 and 32,000, analysts and brokers said.
“The market may see headwinds grow to a maximum level amid intensified worries about the possibility of the Mideast situation going worse and interest rates climbing higher,” an official at a major securities firm said.
Meanwhile, an official at a midsize securities firm suggested that the market would struggle for direction ahead of policy meetings by the Fed and the Bank of Japan the following week.
Brokers also pointed out that selective trading in companies releasing earnings reports would be vigorous with the reporting season for major Japanese firms coming into full swing.
Players are expected to react sensitively to announcements of surprising earnings figures and shareholder returns, they noted.
