Tokyo stocks are expected to continue rising on May 22. The Nikkei Stock Average is likely to extend gains as risk-on sentiment persists, supported by a record-high close for the Dow Jones Industrial Average in the previous session. The expected trading range is 61,700 to 62,700 yen.

In the U.S. stock market, all three major indices rose, with the Dow hitting a record high for the first time in three months. As market attention focused on news regarding ceasefire negotiations between the U.S. and Iran, U.S. crude oil futures closed in negative territory and U.S. long-term interest rates declined. The preliminary U.S. manufacturing Purchasing Managers' Index (PMI) for May rose to 55.3, the highest level in four years. Amid awareness of the resilience of the U.S. economy, NVIDIA Corp , which announced strong earnings the previous day, faced selling pressure as investors took profits on the news, but International Business Machines Corp surged on the U.S. government's announcement of support measures for quantum computing-related companies, pushing up the Dow. The Philadelphia Semiconductor Index (SOX) rose more than 1%. Among semiconductor-related stocks, SanDisk Corp and Arm Holdings Plc posted significant gains. In night session trading on the Osaka Exchange, the June Nikkei 225 futures contract closed at 62,110 yen.

Supported by higher U.S. stocks, the Tokyo market is expected to start the morning session firmly. While futures-led fluctuations are anticipated depending on news content regarding U.S.-Iran ceasefire negotiations, the market is likely to continue its firm tone while digesting profit-taking, as investor preference for AI semiconductor-related stocks continues. Additionally, the Nikkei newspaper's electronic edition reported on the evening of May 21 that "Kawasaki Heavy Industries, Ltd. <7012> will collaborate with U.S. semiconductor giant NVIDIA and others." Attention will focus on the stock price reaction of Kawasaki Heavy Industries and whether investor interest in physical AI-related stocks will increase.

In the U.S. stock market on May 21, the Dow Jones Industrial Average rose 276.31 points to 50,285.66, extending gains from the previous trading day. The Nasdaq Composite Index was up 22.73 points at 20,293.09.

On the schedule, Japan's nationwide Consumer Price Index (CPI) for April is scheduled to be released before the market opens. During trading hours, nationwide supermarket sales for April will be announced. Overseas, the release of Germany's May Ifo Business Climate Index, the U.S. April Conference Board Leading Economic Index, and the U.S. May University of Michigan Consumer Sentiment Index are pending.

Source: MINKABU PRESS

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