March 29th: Next week’s Tokyo stock market is expected to experience heavy price movements with a high top. Photo taken at TSE in October 2018 (2024 Reuters/Issei Kato)
TOKYO (Reuters) – Next week’s Tokyo stock market is expected to see a heavy upward movement. Especially in the first half of the week, there is a risk of increasing selling pressure due to supply and demand at the beginning of the period. After that, it seems unlikely that there will be any sense of direction ahead of the release of US employment statistics at the weekend. As the dollar/yen pair remains high and there are concerns about foreign exchange intervention, it is difficult to see the yen’s depreciation as a factor, and investors are expected to shift their focus from export stocks to domestic demand stocks.
The expected range for the Nikkei average is 39,500 yen to 41,000 yen.
In the first half of the week, there is a risk of downward pressure from supply and demand factors at the beginning of the fiscal year. “Upside prices are likely to be heavy, as balanced funds are expected to rebalance and institutional investors such as banks sell profits at the beginning of the period,” said Naoki Fujiwara, senior fund manager at Shinkin Asset Management Investment Trust. On the other hand, there is a deep-rooted view that stock prices will rise, saying, “Even if there is a correction, buying on the downside will support us” (Mr. Fujiwara).
After the supply and demand factors at the beginning of the period have run their course, in preparation for the March U.S. employment statistics (to be announced on the 5th), which will be released over the weekend, the March U.S. ISM Manufacturing Business Index (1st) and the March ADP U.S. Employment Report (3rd) will be released. The basic trend of the U.S. economy will be determined through economic indicators such as:
Currently, the weak yen is less likely to be seen as a factor. With the dollar remaining at a high level just below 152 yen, there are concerns that the government and the Bank of Japan could intervene in the exchange rate if the yen depreciates further. “It’s hard to imagine that the yen will continue to depreciate, at least in the near term,” said a strategist at a domestic securities firm.
With the yen’s depreciation easing, investors are expected to shift their focus from exporting companies to stocks related to domestic demand, such as real estate, construction, and retail. In the retail sector, Shimamura (8227.T), opens new tab, Sugi Holdings (7649.T), opens new tab, etc. are scheduled to announce their financial results, and individual searches are likely to become more active. In the manufacturing industry, Yaskawa Electric (6506.T), opens new tab (5th) will announce its financial results.
The Bank of Japan Tankan (1st) is expected to be weak due to Daihatsu’s suspension of shipments, but it appears that special factors are being factored in.
*Event diary
*Economic indicator forecast
stock market team
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2024-03-29 13:17:36
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