The Tokyo stock market on the 20th is likely to see buying pressure dominate amid lingering uncertainty in the external environment, with the Nikkei Stock Average expected to rebound. While the previous Friday saw a drop of over 1,000 yen due to concerns over near-term momentum, today could see most of those losses recouped. However, volatility remains high in both directions, and the situation remains unpredictable with news flow from the Middle East requiring close attention. European stock markets rose broadly on the previous Friday. Following reports of the reopening of the Strait of Hormuz, crude oil prices fell sharply, leading markets in various countries to shift toward risk-on sentiment. Germany's DAX in particular surged nearly 2.3%, posting gains for the fourth consecutive session. In the U.S. stock market, bullish sentiment accelerated, with the Dow Jones Industrial Average at one point showing gains exceeding 1,100 points. WTI crude futures dropped sharply to the 80 dollars per barrel level, easing concerns over cost-push inflation. As the U.S. 10-year Treasury yield declined to the lower 4.2% range, investment funds flowed primarily into cyclical stocks. Additionally, U.S. media reported that President Trump stated Iran had agreed to suspend nuclear development indefinitely, further supporting the optimistic mood. However, on the 18th, Iran's Revolutionary Guard subsequently declared a blockade of the Strait of Hormuz, causing Middle East tensions to become unsettled once again. While the Tokyo market is expected to see the Nikkei Average pushed higher led by futures trading on the tailwind of gains in European and U.S. stocks, the still-opaque Middle East situation will weigh on sentiment. During trading hours, movements are likely to be influenced by news headlines and U.S. stock futures, with the possibility of dipping into negative territory at times.

In the U.S. stock market on the 17th, the Dow Jones Industrial Average rose 868.71 points to 49,447.43, posting significant gains for the second consecutive session. The Nasdaq Composite Index gained 365.77 points to 20,468.48.

On the economic calendar for today, Japan will release March white goods shipment value, February tertiary industry activity index, March Tokyo-area condominium sales, and March major convenience store sales. Overseas, China will release its April loan prime rate.

Source: MINKABU PRESS

*Translated by generative AI. Click here for the original article.