Try 40,000 yen, watch to see if it sticks, solid value with recyclables = next week’s Tokyo stock market | Reuters

2024-03-01 11:45:22

March 1st: The Nikkei Stock Average is expected to hit the 40,000 yen level for the first time in the Tokyo stock market next week, and attention will be focused on whether it will be able to maintain that level. The photo shows the Tokyo Stock Exchange building. Photographed in Tokyo in October 2020 (2024 Reuters/Issei Kato)

TOKYO (Reuters) – The Nikkei Stock Average is expected to hit the 40,000 yen level for the first time in the Tokyo stock market next week, and all eyes will be on whether it can maintain that level. Amid a series of announcements of important economic indicators at the beginning of the month, stock prices are likely to trend upwards if expectations for an interest rate cut by the US Federal Reserve become stronger. In Japan, there is likely to be momentum for wage increases ahead of spring labor unions, so Japanese stocks are expected to be bought in a wide range of industries, with high-tech and value sectors expected to remain firm.

The expected range for the Nikkei average is 39,500 yen to 40,500 yen.

The Nikkei average, which had risen by about 6,400 yen since the beginning of the year, rose 824 yen to 39,990 yen.23 on the 1st, due to increased demand for semiconductors for artificial intelligence (AI) and expectations for an improvement in the price-to-book ratio (PBR). The price hit a high and was just 10 yen shy of the 40,000 yen mark.

The Bank of Japan’s expectations for an early return to normalcy are a disturbing factor, but one domestic securities strategist says, “The lifting of negative interest rates has already been factored in, so it doesn’t seem to be a factor pushing down stock prices.” On the 29th, Bank of Japan Councilor Hajime Takada stated, “We are finally in a situation where we can see the achievement of the 2% inflation target.” Although the market reacted with a strong yen and falling stock prices, the following day, on the 1st, the yen weakened again. , and the Nikkei average reached a new all-time high.

Chiaki Hirokane, strategist at Resona Holdings, said, “Expectations for a virtuous economic cycle due to the normalization of monetary policy, including the lifting of negative interest rates, and wage increases are likely to lead to a slow start and a cyclical focus on the value sector.” Next week, both value and high-tech will become solid, and the Nikkei average will likely aim for the 40,000 yen mark.

Next week, Federal Reserve Chairman Jerome Powell will testify before Congress, and the ISM non-manufacturing business index and employment statistics for February will be released. Domestically, the February consumer price index for Tokyo and wards, as well as the aggregated results of the Japan Federation of Labor Unions’ demands for wage increases, will be made public.

*Event diary

*Economic indicator forecast

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