Tokyo Stocks Seen Remaining Weak This Week, Due to Continued Profit-Taking
13:50 JST, July 8, 2023
TOKYO (Jiji Press) — Tokyo stocks are likely to remain on a weak note due to continued profit-taking this week, with investors carefully waiting for the releases of key U.S. economic data, market sources said Friday.
Last week, the Nikkei average of 225 selected issues listed on the Tokyo Stock Exchange’s Prime section sank 800.62 points, or 2.41%, to end at 32,388.42 Friday.
The Nikkei marked a fresh 33-year high on Monday, thanks to strong results of the Bank of Japan’s “tankan” quarterly business sentiment survey for June.
But the market gave up ground on the next four days on profit-taking and selling on worries over further interest rate hikes by the U.S. Federal Reserve.
This week, the Nikkei average is expected to move mainly between 31,500 and 33,000, analysts and brokers said.
“The market will likely continue to be in a correction phase, with investors viewing stocks as remaining overpriced after its bull run in the last two months,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.
Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc., agreed, predicting that the market will spend this week “processing profit-securing demand.”
Market players will pay close attention to the release of the U.S. consumer price index for June on Wednesday, refraining from active trading in the first half of this week, said Masayuki Otani, chief market analyst at Securities Japan Inc. The CPI is regarded by market players as key information about the state of U.S. inflation that helps them gauge whether the Fed’s interest rate increases will be prolonged.
The U.S. central bank’s Beige Book report on regional economic conditions, to be released the same day, and the U.S. producer price index for June, due out Thursday, are also being closely watched, Ota said.
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