Nikkei average expected to remain near 60,000 yen level next week, with TOYOTA MOTOR earnings in focus

The Nikkei Stock Average rose 228 yen on the 1st to 59,513 yen compared to the previous day, rebounding for the first time in three days. The focus of attention on this day was Tokyo Electron Limited <8035>. The company's stock surged more than 8% at one point and hit a record high as its earnings results announced the previous day were well received. The single stock alone pushed up the Nikkei Stock Average by approximately 300 yen. Combined with SoftBank Group Corp. <9984>, the contribution amounted to over 470 yen, indicating that the concentrated rally in AI and semiconductor-related stocks continues.

The earnings season has just begun, but many stocks, including Tokyo Electron, are exceeding analyst expectations, and the results are viewed as favorable. Although ADVANTEST CORPORATION <6857> fell short of expectations, many market participants believe that "conservative guidance was presented," according to market sources.

Recently, earnings per share (EPS) on a Nikkei average constituent basis has approached 3,000 yen, and as profits are steadily accumulating, "60,000 yen is by no means an overvalued level," according to an analyst. However, on the TSE Prime Market on the 1st, while 39 stocks hit new year-to-date highs, 191 stocks recorded new year-to-date lows. The structure in which the sharp rise in AI and semiconductor-related stocks is supporting the market is clear. For this reason, if semiconductor-related stocks, which are the driving force, turn downward, the overall market may suffer a significant reactive decline.

Next week, the Tokyo market will be open for only two trading days due to Golden Week. In particular, on the 8th, TOYOTA MOTOR CORPORATION <7203>, SONY GROUP CORPORATION <6758>, and Nintendo Co., Ltd. <7974> will announce their earnings, and the results are expected to attract attention. Overseas, earnings from Advanced Micro Devices on the 5th and Arm Holdings on the 6th are drawing interest. In the United States, the April employment statistics will be released on the 8th.

Other scheduled events include overseas releases of U.S. March manufacturing orders on the 4th, U.S. April ISM non-manufacturing PMI, U.S. March JOLTS job openings, U.S. March trade balance on the 5th, U.S. April ADP employment statistics on the 6th, and U.S. May University of Michigan Consumer Sentiment Index on the 8th. Palantir Technologies will announce earnings on the 4th, Walt Disney on the 6th, and McDonald's on the 7th.

Domestically, the market will be closed until the 6th. On the 7th, the April Tokyo office vacancy rate and minutes from the Bank of Japan's Monetary Policy Meeting held on March 18-19 will be released. On the 8th, the March Monthly Labor Survey will be released, and it will be the calculation date for the Special Quotation (SQ) of stock index options. Ajinomoto Co., Inc. <2802>, YOKOGAWA ELECTRIC CORPORATION <6841>, and Sumitomo Forestry Co.,Ltd. <1911> will announce earnings on the 7th, and PENTA-OCEAN CONSTRUCTION CO.,LTD. <1893>, TAIYO YUDEN CO., LTD. <6976>, and NTT, Inc. <9432> will announce earnings on the 8th. The expected range for the Nikkei Stock Average next week is around 58,300 to 60,700 yen. (Hideyuki Okazato)

Source: MINKABU PRESS

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