Stocks Likely to Struggle for Direction amid Dearth of Major Scheduled Events
17:01 JST, October 14, 2023
TOKYO (Jiji Press) — Tokyo stocks are likely to struggle for direction this week amid a dearth of major scheduled events, market sources said Friday.
Last week, the Nikkei average of 225 selected issues listed on the Tokyo Stock Exchange’s Prime section surged 1,321.32 points, or 4.26%, to end at 32,315.99.
The Nikkei average gained around 1,500 points in the three days through Thursday, mainly reflecting the strength of the U.S. market, before succumbing to profit-taking pressure on Friday. Monday was a national holiday.
This week, the Nikkei is expected to move tightly between 31,500 and 32,500, analysts and brokers forecast.
Media reports about the escalating conflict between Palestinian militant group Hamas and Israel and U.S. Republican turmoil over the House speaker election could sway overseas stocks but “fail to determine the course of the Tokyo market,” a major brokerage house official said.
Fluctuations in crude oil prices and U.S. long-term interest rates could have some impacts on Tokyo stocks. But those are unlikely to be powerful enough to help them out of range-bound trading, a broker noted.
An extraordinary session of the Diet will begin on Oct. 20, with the government and the ruling coalition aiming to introduce and enact a fiscal 2023 supplementary budget to implement fresh economic measures.
“Expectations for the measures will likely underpin the market,” the securities firm official said.
But now that an earnings season for firms that closed their books at the end of August is over, stock-specific transactions would lose steam.
“Although anticipation of upward revisions to earnings estimates may grow ahead of the next reporting season, which will come into full swing the following week, the market will likely remain top-heavy with many players sitting on the fence to wait for actual numbers,” market sources said.
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